Thursday Morning Livestock Market Update - Another Ban on Cattle Movement

GENERAL COMMENTS:

News about the New World screwworm has been a daily occurrence. Canada banned the importation of Texas cattle and now Mexico has joined them. Mexico is halting most livestock imports from the United States, including cattle, pigs, and sheep. There is not much livestock that moves from the U.S. to Mexico, but the ban has been implemented. So far, the market has digested the news of the past week and decided it was not bearish. The bearish aspect would be if beef demand were to decline. Cash cattle have not traded so far this week, as feedlots have not jumped to sell cattle aggressively due to the news. The expectation is for cash to trade steady to higher. Boxed beef prices were mixed on Wednesday, with choice up $0.38 and select down $1.23.

Hog futures moved higher as traders may have tried to bottom-pick the market due to it being near support. Early strength ran out of steam with most contracts making new lows, but avoided closing below support. Friday is the last trading day for June hogs, with the price closing near the low last seen Nov. 24, 2025. The downtrend has been brutal since futures topped on March 4. Packers remained aggressive on Wednesday with the National Daily Direct Afternoon Hog report up $0.04. Packers are not expected to be aggressive the rest of the week. Pork cutout values remained unchanged from Tuesday. Weekly hog weights averaged 289.4 pounds. The USDA will release the WASDE report at 11 a.m. CDT Thursday, which will show its estimates for average quarterly prices into next year.

	BULL SIDE		BEAR SIDE
1)	Traders have not turned bearish and liquidated positions due to the New World screwworm being discovered in the U.S.	1)	Packers may not need to be aggressive with cash purchases this week and may not raise their bids. Feedlots may need to lower offers to move cattle.
2)	Feedlots have not panicked and sold cattle this week, but may hold for steady-to-higher cash.	2)	Cattle futures may be developing a sideways pattern for the near term. A return to the highs may be difficult to achieve.
3)	Hog futures are oversold and prices near support may trigger short-covering.	3)	Weekly hog weights are 2.2 pounds higher than a year ago. Increased slaughter provides significantly more pork for consumers.
4)	Weekly hog weights declined one pound from the previous week, averaging 289.4 pounds.	4)	If futures break through and close below the November support, they could make another leg lower.