Monday Morning Livestock Market Update - Cattle Futures Expected to Open Lower

GENERAL COMMENTS:

Cash cattle managed to trade at even money with the previous week, which is considered a victory given the uncertainty of the market. However, even with cash being steady, packers purchased cattle for deferred delivery as feedlots were willing to move more cattle at the steady price. This may put packers in a better position this week. The Cattle on Feed report was released and is considered to be bearish for the market. The surprise was the placement number. The average estimate was 100.3%, with the actual number at 104%. This marks the first such month since April 2025 that placements over 100%. On feed numbers were 100% and slightly higher than the 99.3% estimated. Marketings were slightly better at 93% versus the 92.4% estimated. This is a bearish report and should negatively impact the market today. Boxed beef prices were mixed, with choice down $0.19 and select up $0.49. The Commitment of Traders report showed a reduction in the funds' live cattle long positions by 2,767 contracts to 103,143. Fund traders increased their net-long position in feeder cattle by 662 contracts totaling 19,374.

Hog futures could not find sufficient support for the market to close higher on Friday. Contracts closed near technical support, which may trigger some buying interest. Packers were done buying for the week, which was reflected in the National Daily Direct Afternoon Hog report with the average price down $2.42. However, there is a strong chance packers will be aggressive to begin the week in preparation for the upcoming Easter demand. Pork cutouts increased by $1.15. The Commitment of Traders report showed the fund traders reducing their long position by 10,874 contracts to a net long of 109,736.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report showed placements at 104%, but this is not as bearish as it seems, as placements a year ago were 82.2%.	1)	Placements in February were 4% higher than a year ago and higher than the trade expectations.
2)	Cattle futures may have the Cattle on Feed report already factored in, and a negative knee-jerk reaction may be short-lived.	2)	Packers were able to purchase cattle ahead, which may keep them less aggressive this week.
3)	Hog futures closed on or near support. This may be viewed as a buying level for technical traders.	3)	If hog futures see pressure that pushes futures below support, further selling could be triggered.
4)	Packers may be aggressive early in the week as they look ahead and prepare for Easter demand.	4)	Pork demand is good, but not good enough to provide consistent support to cash and cutouts.