Monday Morning Livestock Market Update - A Cautious Beginning Is Expected

GENERAL COMMENTS:

Cattle futures continued their descent on Thursday with further selling due to the cash cattle weakness. Southern live cattle had further sales averaging $3.00 lower, with Northern dressed cattle $5.00 lower. The weakness last week may have set the stage for prices to retest the lows from June 4. The weakness in boxed beef may add to the pressure. Boxed beef prices on Thursday were lower, with choice down $4.19 and select down $2.26. Now that holiday demand is behind, and summer weather impacts beef demand, further weakness in boxed beef prices may continue. Cattle supplies remain low, but demand will dictate prices.

Hog futures showed continued spread trading. Bull spreading on Thursday indicates market uncertainty about demand and prices late this year and into 2027. The December and February contracts tested the lows from Nov. 14, 2025. Bullish traders continue to search for any signs of support, but have been unable to find it. The National Daily Direct Afternoon Hog report on Thursday showed cash down $1.45. Packers may step up aggressively today to purchase after the holiday, as they increase slaughter. Pork cutouts increased $0.35.

	BULL SIDE		BEAR SIDE
1)	Crude oil prices continue to weaken, with some projections that prices could fall back near $60 per barrel. This will increase disposable income and maintain beef demand.	1)	Live cattle futures fell below the 40-day moving average last week, increasing the selling interest of technical traders.
2)	After five days of futures weakness and lower highs, bullish traders may step back in to buy the break.	2)	The weakness last week in cattle futures may set the stage for futures to retest the lows from June 4.
3)	Packers may step up to purchase hogs aggressively today to increase slaughter and make up for the holiday-shortened week. This would improve cash.	3)	Hog futures are in jeopardy of falling below the lows in later contracts. This could open the door for further selling.
4)	Technical traders may increase buying interest at contract lows as it is unlikely hog prices will remain at those levels.	4)	Cash hogs and pork cutouts continue to fluctuate in a range, leaving traders disappointed. Pork supplies remain plentiful.