Tuesday Morning Livestock Market Update - Technical Trade Provides Support

GENERAL COMMENTS:

The June and August live cattle contracts close above technical resistance and are on their way to closing the chart gaps and revisiting contract highs. Traders have regained confidence in higher cattle prices as numbers remain tight. The wildfires in Nebraska and the drought in a significant portion of cattle country may tighten supplies even more as time progresses. Some cattle have already been sold and will be sold if the drought continues in those areas. This will delay the rebuilding of the cattle herd and may further tighten supplies. There will be more emphasis on beef-on-dairy cattle supplies, driving those prices higher than they already are. The boxed beef prices were higher, with choice up $1.13 and select up $1.14.

Hog futures had little to show at the end of the day, with contracts closing slightly lower. The good news is they held the recent gains, but without outside fundamental support, traders will look to cash and cutouts for direction. Packers got an early start to the week and bid higher for hogs. The holiday-shortened week may keep them more aggressive early. The National Daily Direct Afternoon hog report showed cash up $0.40 on a good amount of hogs purchased. Cash is expected to be higher Tuesday as packers remain aggressive. Pork cutout values increased by $1.01, but continued gains need to be seen, or hog futures may flounder. The increased slaughter pace continues, indicating strong demand.

	BULL SIDE		BEAR SIDE
1)	The June and August live cattle contracts moved into the chart gaps that remained since Oct. 17, 2025, and are poised to close those gaps.	1)	Packers have some cattle purchased ahead for this week and next week, and may not be aggressive due to the holiday-shortened week.
2)	The June and July live cattle contracts closed above technical resistance and are expected to revisit the contract highs of Oct. 16, 2025.	2)	Boxed beef prices may again reach a threshold around the $400 level and may find consumer resistance as fuel prices escalate.
3)	Hog futures held the recent gains with only minimal losses. Traders are willing to support the market.	3)	Cash hogs and cutout prices have yet to find consistent support. This will keep traders' buying interest limited.
4)	The continued strong slaughter pace will keep hogs current and may eventually tighten supplies.	4)	Hog supplies remain plentiful, with packers able to obtain the hogs they need for increased slaughter without difficulty.