Tuesday Morning Livestock Market Update - Packers Will Remain Quiet

GENERAL COMMENTS:

Corn weakness is giving a much-needed boost to the feeder cattle market, pushing futures above the 200-day moving average Monday. From a technical perspective, this should give way for the market to climb higher. Choice cutouts were slightly lower Monday while select cutouts were $6.86 higher. Cash prices for live cattle improved last week by an average of $4/cwt. Packers were able to purchase 90,762 head, an increase of 23,061 head from the previous week. With the Cattle on Feed report expected to be supportive of prices, we wait and see how much was priced in on last week's rally.

Last week's Commitments of Traders report showed managed money selling even more lean hog contracts, approaching the record net short set in September 2025. As of last week, managed money sold an additional 7,113 contracts, bringing the current net position to short 48,617 contracts. Commercial open interest liquidated 1,029 of their short contracts, bringing their net position to a short of 1,389 contracts. With the lack of pork demand and the overwhelming amount of big money interests selling pressure, it is going to be difficult for lean hogs to find a leg to stand on under these market conditions.

	BULL SIDE		BEAR SIDE
1)	The Cattle on Feed report is expected to have lower placements and on feed numbers this Friday, Oct. 23.	1)	Packers bought big last week, making them comfortable to wait for deals this week.
2)	Corn prices falling helps feeder cattle buyers stand in and buy even as cash prices increase.	2)	The market is convinced the Cattle on Feed report will be supportive. Anything less supportive than what is actually printed can bring a quick sell-off in futures from market disappointment.
3)	Mexico is growing pork demand from the United States, although it is slowing.	3)	Commitments of Traders report showed managed money selling a large number of lean hog contracts yet again last week.
4)	As pork prices slip lower, the incentive of the consumer to buy in store grows. Low prices usually cure low prices with added demand.	4)	Pork demand is sluggish with consumers preferring beef or chicken today.