GENERAL COMMENTS:
The livestock complex is mixed into Tuesday's noon hour as the cattle contracts are trading sideways, but the lean hog contracts are mostly lower. Still no cash cattle trade has developed and won't likely until Thursday or Friday. March corn is up 3/4 cent per bushel and March soybean meal is up $2.90. The Dow Jones Industrial Average is up 248.92 points and NASDAQ is up 10.37 points.
LIVE CATTLE:
In trying to wait patiently for the week's fundamentals to shine through the marketplace, the futures complex is mixed as traders simply aren't willing to advance the market at this point without first seeing fundamental reassurance develop. February live cattle are up $0.42 at $239.87, April live cattle are down $0.02 at $238.17 and June live cattle are up $0.25 at $234.57. It's quite likely the market could enter a sideways trading range until it sees what the fed cash cattle market is going to accomplish this week. Traders don't want to pressure the market's resistance from a technical standpoint, but at the same time they believe in the market's long-term, bullish fundamental outlook, which is why a sideways trend is most likely to be the theme throughout the remainder of the day and until cash cattle begin to trade.
Tuesday's WASDE report shared a fruitful outlook for the cattle and beef markets of 2026. Beef production for 2026 was increased by 185 million pounds as fed cattle slaughter is expected to increase, cow slaughter is expected to increase, and carcass weights are obviously higher. I personally question what leads them to believe fed cattle and cow slaughter speeds are going to increase -- as the entire industry knows supplies are historically thin, and that's not expected to change in 2026, and potentially not in 2027 either. But as always, time will tell. The quarterly steer price projections were bullish as every single quarter for 2026 was increased from January's estimates. Steers in the first quarter of 2026 are expected to average $238 (up $6.00 from last month), steers in the second quarter are expected to average $238 (up $4.00 from last month), steers in the third quarter are expected to average $240 (up $3.00 from last month) and steers in the fourth quarter are expected to average $245 (up $5.00 from last month). Beef imports for 2026 were increased by 50 million pounds and beef exports for 2026 remained steady.
Boxed beef prices are mixed: choice up $2.24 ($370.00) and select down $0.82 ($364.53) with a movement of 74 loads (53.35 loads of choice, 4.31 loads of select, 4.17 loads of trim and 11.88 loads of ground beef).
FEEDER CATTLE:
Without a strong presence seen in the live cattle complex, the feeder cattle contracts are also trading mixed into Tuesday's noon hour. But what remains interesting about the feeder cattle market's behavior is the deferred contracts aren't concerned about what the live cattle contracts are doing and instead are trading fully higher, seeming more focused on the market's long-term situation of short supplies. March feeders are down $1.35 at $366.10, April feeders are down $0.37 at $362.82 and May feeders are up $0.55 at $358.32.
LEAN HOGS:
The lean hog complex is again trading lower as the market seems to be anticipating increased supplies that are soon to hit the market. The last quarterly Hogs and Pigs report unveiled more market-ready supplies than what the industry anticipated, and there were plenty of hogs noted in the heavy weight categories which will meet the consumer in the supply chain at any point in time now. But what also remains true is that while the futures complex may be scaling lower, pork demand over the last two weeks has been noticeably stronger, which one may logically assume is because some consumers are electing to purchase pork as opposed to beef as it's a cheaper protein option. February lean hogs are down $0.30 at $86.80, April lean hogs are down $0.87 at $95.85 and June lean hogs are down $0.45 at $109.35.
The projected CME Lean Hog Index for 2/9/2026 is down $0.15 at $86.32, and the actual index for 2/6/2026 is down $0.11 at $86.46. Hog prices on the Daily Direct Morning Hog Report averaged $84.92, ranging from $84.00 to $88.50 on 1,585 head and a five-day rolling average of $85.65. Pork cutouts totaled 180.09 loads with 158.85 loads of pork cuts and 21.24 loads of trim. Pork cutout values: up $0.57, $96.40.
Tuesday's WASDE report shared a positive outlook for the hog and pork markets of 2026. Pork production for 2026 was increased by 60 million pounds as both slaughter speeds and carcass weights are heavier than originally anticipated. The quarterly price projections for hogs were bullish as well as every single quarter saw an increase from January's estimates. Hogs in the first quarter of 2026 are expected to average $65 (up $1.00 from last month), hogs in the second quarter are expected to average $73 (up $3.00 from last month), hogs in the third quarter are expected to average $75 (up $3.00 from last month) and hogs in the fourth quarter are expected to average $63 (up $2.00 from last month). Pork imports for 2026 remained steady, but pork exports increased by 50 million pounds.
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