GENERAL COMMENTS:
Cattle futures surged higher at the opening bell Monday morning and maintained active gains through the entire trading session. Although live cattle futures closed well below daily highs, the ability to sustain the $2 per cwt market rally early in the week is still considered a major win. Last Friday's Cattle Inventory report was the main spark to the renewed buyer support. This report posted that overall cattle numbers were below year-ago levels, and beef cow numbers were 1% below year-ago levels. Calves born last year fell 2% from the year previous. This bullish report was encouraging for the market. But at the same time, we really don't know much more about the overall scope of the market support. Even without specific numbers, it was not unknown in the industry that cattle supplies have tightened, which has led to current price levels. The challenge in maintaining the most recent market gain is understanding how demand will react to the current supply shortages, and what will happen in the overall beef market over the next two years, when it comes to rebuilding or sustaining the current herd. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.35 with a weighted average of $82.22 on 715 hogs. March corn closed down 2 1/2 at $4.258 and March soybean meal closed up $0.90 at $294.5. The Dow Jones Industrial Average is up 515.19 at 49,407.66.
LIVE CATTLE:
Live cattle futures posted strong triple-digit gains Monday in reaction to continued bullish beef and cash market news as well as last Friday's Cattle Inventory Report. Steers weighing 500 pounds or more are down 1% from year-ago levels, with total cattle and calves on feed in all feedlots down 3% from year-ago levels. The main change in year-over-year levels is seen in reporting feedlots with fewer than 1000 head. This is a segment that is not measured in the monthly cattle on feed reports and impacts overall numbers, although not the majority of the industry. Cash cattle markets are quiet in the country this afternoon, with bids and asking prices not established. Significant trade volume will likely be delayed until much later in the week. New showlists appear to be lower in all major feeding areas, somewhat lower in Texas, but lower in Kansas, Nebraska/Colorado. February live cattle closed $2.33 higher at $238.175, April live cattle closed $2.73 higher at $239.525 and June live cattle closed $2.53 higher at $234.25.
Monday's slaughter is estimated at 108,000 head, 8,000 head more than a week ago and 5,450 head less than a year ago.
Boxed beef prices closed higher: choice up $2.65 ($368.21) and select up $2.97 ($364.91) with a movement of 58.44 loads (33.34 loads of choice, 8.86 loads of select, 7.12 loads of trim and 9.12 loads of ground beef).
TUESDAY'S CATTLE CALL: Steady to $1 Higher. Strong futures market support, as well as expected strength in beef values through the week, is expected to keep feeders actively pricing cattle higher than last week. It is likely to be the end of the week before active trade develops.
FEEDER CATTLE:
Feeder cattle skyrocketed higher through the day, with March futures leading the market gains at the closing bell with a $6.07 per cwt rally. The confirmation that overall cattle inventory numbers are tight in Friday's Cattle Inventory Report, which is no surprise to anyone, sparked intense buyer interest as traders now have a number to put toward this tightness and market trend. The fact that overall cow herd reductions continue through 2025 and overall calving levels were 2% lower in 2025 compared to the previous year points to continued challenges getting access to calves to supply the beef demand over the next couple of years. The focus on strong buyer support continues through all 2026 contracts with a limited price spread in all nearby futures contracts.
March feeders closed $6.08 higher at $366.35, April feeders closed $5.90 higher at $364.175 and May feeders closed $5.23 higher at $360.35. The CME Feeder Cattle Index for January 29: up $3.72, $374.41.
LEAN HOGS:
Lean hog futures posted moderate to strong gains Monday as supportive buyer interest came in from different directions. One side pointed to the rest of the livestock trade skyrocketing sharply higher based on lower-than-expected cattle inventory levels at the end of the year. But if this wasn't enough, a strong stock market and financial support flooded the market. This helped stimulate buyer support in most contract months, but the majority of support developed in spring and summer 2025 contract months. The focus on positive gains in economic markets points to support in overall demand both domestically and in export markets. This upward move has not pushed May contracts above $100 per cwt, as traders look for further market direction as the week continues. February lean hogs closed $0.50 higher at $87.75, April lean hogs closed $1.48 higher at $96.625 and May lean hogs closed $1.70 higher at $100.625. Monday's hog slaughter is estimated at 461,000 head, 35,000 head more than a week ago and 15,000 head less than a year ago. Pork Cutouts totaled 287.08 loads with 240.68 loads of pork cuts and 46.40 loads of trim. Pork cutout values are up $1.48 at $95.7. The CME Lean Hog Index for January 29: up $0.06, $85.78.
TUESDAY'S HOG CALL: Steady to $1 Higher. Firm outside market support is expected to firm price levels through the week as packers continue to gain access to market-ready hogs. The ability to sustain futures prices and advance pork values in the next few days will help to give additional direction to cash hog markets.
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