Monday Morning Livestock Market Update - Cattle Futures May Show Follow-Through Selling

GENERAL COMMENTS:

Cattle futures plummeted for a second consecutive day, with the nearby June contract posting the lowest close since Dec. 31, 2025. Selling momentum drove futures below technical support, adding to the weakness. Lower cash cattle trade took place on Friday, adding to the pressure. There could be follow-through liquidation today on continued uncertainty over the JBS strike, the Iran situation and lower cash. Northern dressed cattle traded $5 lower and southern live cattle traded $5 lower. This combination may not bode well for the market in the near term. Boxed beef prices closed higher with choice up $1.95 and select up $3.52. The Commitment of Traders report showed fund traders adding 1,911 live cattle futures positions, bringing their net-long positions to 116,963. They added 878 contracts in feeder cattle, bringing their net-long position to 19,634.

Hog futures closed mixed with weakness through the October contract and higher prices after that. The December and later contracts continued to make new highs. Optimism over increased demand continues to underpin the market. The slaughter pace remains strong as packers need to meet demand. A significant volume of cash hogs traded on Friday, with the price down $0.62. Packers may begin the week aggressively, similar to last week. They need hogs to maintain the increased slaughter pace. Pork cutout values increased by $0.39. The Commitment of Traders report showed the funds as net sellers, reducing their long position by 85 contracts to a net long of 111,133.

	BULL SIDE		BEAR SIDE
1)	Liquidation generally runs its course over a two- or three-day period. Today is day three. The lower prices might find buying interest.	1)	There is too much uncertainty both in the market and in the outside markets that may keep pressure on cattle futures.
2)	Live cattle futures are quite a bit below cash and may be overdone to the downside.	2)	The weakness of cash cattle last week may be the beginning of further cash weakness over the next few weeks.
3)	The trend in hog futures is up, and the weakness on Friday may have been positioning before the end of the month.	3)	The optimism over pork demand will need to find continued underlying cash and cutout support or it will run out of strength.
4)	The hog slaughter pace remains strong, and packers may be willing to bid up today to purchase early.	4)	Trading activity may drift to begin the month as traders wait to see the strength of cash and cutouts.