Wednesday Morning Livestock Market Update - Fundamental Support Remains Elusive

GENERAL COMMENTS:

Light cash cattle trade took place on Tuesday, indicating significantly lower prices may be experienced again this week. Packers are taking advantage of the market's bearishness to buy at lower prices, while boxed beef increases, improving margins. Boxed beef prices on Tuesday were higher, with choice up $2.84 and select up $3.96. The cattle market is caught in a downdraft with live cattle futures closing at the lowest level since Dec. 1, 2025. Feeder cattle futures have followed the same pattern and are near closing a chart gap that has remained open since then. However, it is uncertain whether closing the chart gap would turn technical traders into aggressive buyers in the current market environment. Reports are that 700 head of cattle from Mexico moved into the U.S. on the first day the border was reopened. There were no reports as to the age and weight classes of those cattle.

Hog futures cannot catch a break with new contract lows again on Tuesday. Futures breaking below recent support does not bode well for the market. The weakness in pork cutout values indicates reduced demand. Cutout values declined $2.26 on Tuesday. Cutouts were lower in all categories except ribs, which gained $1.06. Bellies fell $6.60. The National Daily Direct Afternoon Hog report showed cash up $1.62 on good volume. Packers may remain somewhat aggressive Wednesday, but likely not as much because of weakness in cutouts.

	BULL SIDE		BEAR SIDE
1)	Cattle futures are oversold and could retrace if the bearishness prevalent in the market subsides.	1)	Light cash cattle trade on Tuesday indicates lower prices again this week as packers take advantage of market weakness.
2)	If feeder cattle close the chart gaps remaining from Dec. 1, short-covering and buying interest may surface.	2)	The path of least resistance is down, and cattle futures are in a downward spiral.
3)	Hog futures are oversold and may be nearing a point where traders are unwilling to push the market lower and cover their short positions.	3)	New contract lows in hog futures do not bode well for the market finding support anytime soon.
4)	The cure for low prices is low prices, as it improves demand. Consumers may increase pork consumption as they stretch their food dollars.	4)	Traders have been unable to find consistent fundamental support for hogs.