Friday Morning Livestock Market Update - Higher Cash Cattle Trade Expected

GENERAL COMMENTS:

The June live cattle contract set a new contract high as it needs to move closer in line with cash. Tuesday is the last trading day for the contract. The rest of the live cattle contracts were slightly higher but well off their daily high. The market continues to hold a discount in later contracts. Feeder cattle futures are in better posture, with contracts moving very close to the contract highs. There is a strong appetite for feeder cattle in the country. The cash cattle trade has been nearly nonexistent this week, but will erupt today as packers are expected to increase bids to obtain cattle. Boxed beef prices were lower on Thursday, with choice down $2.62 and select down $3.40.

The Quarterly Hogs and Pigs report showed all hogs on June 1 were at 100% of a year ago. This was 1% below the trade estimate. Hogs kept for breeding were at 99% compared to the estimate of 99.3%. Hogs kept for marketing were at 100% versus the estimate of 101.1%. The various weight categories were all at 100% of a year ago. Farrowing intentions were at 99% with the March-May pig crop at 100%. Pigs per litter were 11.87, up 1% from June 2025. This is considered to be a neutral report, but it could support the market at the current level. The National Daily Direct Afternoon Hog report showed a decline of $0.27. Packers may be more aggressive today to finish up purchases for the week. Pork cutout values on Thursday were up $1.36.

	BULL SIDE		BEAR SIDE
1)	Feeder cattle futures are very near to making new contract highs. A break above that level could generate further buying interest.	1)	Live cattle futures have just not been able to move to and through contract highs. This may be a level of resistance.
2)	Higher cash cattle trade is expected as feedlots hold out. Packers seem to be short of cattle.	2)	Deferred live cattle contracts hold a substantial discount to cash as traders anticipate prices to decline.
3)	The Hogs and Pigs report was not bearish to the market but neutral to slightly supportive. This may support the market.	3)	The neutral Hogs and Pigs report may not provide a catalyst to generate strong buying interest in futures.
4)	The recent pattern has been that packers were more aggressive in the cash market on Friday. The same may be true again today.	4)	There has been no interest for technical traders to purchase hog futures to correct the oversold market. Fundamental support for higher prices remains elusive.