Wednesday Morning Livestock Market Update - Another Mexican Cattle Port Opens

GENERAL COMMENTS:

Live cattle traded both higher and lower throughout Tuesday with the final bell showing small gains on the soon expiring October contract and the deferred contracts 35 to 77.5 cents/cwt lower. Feeder cattle had a strong close with the October contract up $2.90 and the November contract up $1.475 at settlement. The Feeder Cattle Index was estimated at $350.67 Tuesday, the first time above 350 in over two months. Beef cutout values had another large increase on Tuesday afternoon with choice up $2.78 and select $1.29 higher. 620 head of Mexican feeder cattle crossed at the Columbus, New Mexico, port on its first day back in operation, with an estimated 150,000 head total of Mexican imports expected by the end of the year.

Lean hog futures continue to be under pressure as futures fell anywhere from $2.65 nearby to $1.925 lower on the April contract. The December contract made another new contract low today by trading 61.625. Fundamentals have not changed and it is expected that managed money will continue to sell lean hog futures until the demand picture changes or slaughter numbers decrease. Smithfield Foods reported lower sales forecast for 2026, adding to the overall bearish tone to the market. Pork cutouts fell again on Tuesday, down another 71 cents on the carcass and as much as $3.19 lower on the belly or $2.28 lower on the loin. Picnic cuts have improved since Monday at $2.56 higher.

	BULL SIDE		BEAR SIDE
1)	Low placements will continue to support the feeder cattle market.	1)	Another Mexican cattle port opened this week, with the first day of operation already at 50% of the typical volume seen before closure.
2)	Beef cutouts have been increasing steadily since last week, showing improved demand.	2)	As chicken and pork prices decline, beef will eventually price itself out of demand with cheaper protein alternatives.
3)	In four out of the last five years, pork cutout values peaked for fourth quarter in October. Holiday demand is still something for the market to look forward to.	3)	Lean hogs hit another contract low on the December contract Tuesday.
4)	The U.S. hog herd is down 2% from September 2025.	4)	Pork cutout values have declined over 30% from their summer peak.