Friday Morning Livestock Market Update - Feedlots Hold For Higher Prices

GENERAL COMMENTS:

Cash cattle were expected to trade higher Thursday, but when they did traders became aggressive buyers. The February contract pushed through technical resistance while later contracts made new highs. Feeder cattle followed suit but led the way with greater gains. Southern lived cattle sales were $2.00 to $3.00 higher. There is potential for Northern dressed sales to see even greater gains. Futures are adjusting higher to remain in line with cash. This buying interest is likely to have managed money traders holding a record-long position. Boxed beef closed lower for the second day with choice down $0.74 and select down $0.29. Feeder calves and cattle at auctions continue to bring higher money as demand remains strong.

Hog futures showed some buying interest at the lows on Thursday as traders bought the break. The market was not supported by cash or cutouts. The National Daily Direct Afternoon Hog report showed a steady price compared to the previous day. The packers should have most of their business done and may not be aggressive Friday. Pork cutouts were unable to find support with values down $0.98. The weakness of cash and cutouts may be due to the two, back-to-back holiday weeks; better demand and the resumption of regular slaughter may support the market.

	BULL SIDE		BEAR SIDE
1)	New contract highs in cattle will keep technical traders active as they trade with the trend. The fundamentals also provide support for higher prices.	1)	The demand for beef may slow as the prices move to record highs. International demand may be affected as buyers turn away.
2)	Packers are short-bought and need to purchase cattle. Feedlots continue to hold for higher prices, requiring packers to pay up or go without cattle for slaughter.	2)	If there is any indication of the resumption of feeder cattle imports from Mexico, traders may liquidate as a knee-jerk reaction to the news.
3)	The lower opening and lower early trade were rejected as the day progressed. Traders increased their interest in buying the break.	3)	Weekly hog weights increased by 2.6 pounds from the previous week, averaging 292.3 pounds, just 0.2 pounds below a year ago.
4)	Demand is likely to improve with packers more aggressive next week as the slaughter returns to normal. Packers will need hogs to maintain full slaughter schedules.	4)	Packers should have most of their purchases done for the week and will lower their bids Friday for any hogs that will be offered for sale.

Thursday Closing Livestock Market Update - Southern Live Cattle Trade $2.00 to $3.00 Higher

GENERAL COMMENTS:

If today's trade was a glimpse of what may come in 2025 -- there's not a cowman out there who doesn't wish he had more cows. Both the live cattle and feeder cattle contracts traded notably higher as traders continue to believe in the market's long-term bullishness. March corn is up 1 cent per bushel and March soybean meal is up $3.00. The Dow Jones Industrial Average is down 151.95 points.

LIVE CATTLE:

What a day, what a day, what a day it was for the live cattle complex! Traders came back from the New Year holiday charged and ready to support the live cattle complex which helped propel the contracts from $1.00 to $2.00 higher. More than anything traders' belief in the market's bullish trajectory seems unquestioned at this point as today's support was overflowing. February live cattle closed $2.00 higher at $193.60, April live cattle closed $1.77 higher at $196.05 and June live cattle closed $1.72 higher at $191.35. The cash cattle trade saw a little movement in the South where live cattle traded for mostly $195 to $196 which is $2.00 to $3.00 higher than last week's weighed average. And although bids were offered throughout the day in the North, dressed sales haven't fully developed yet. Bids of $310 dressed and $198 live were offered throughout the day in Nebraska, but feedlot managers seem confident that if they'll be patient and wait a little longer, packers will up the ante. 

Thursday's slaughter is estimated at 125,000 head -- 6,000 head more than a week ago and steady with a year ago.

Boxed beef prices closed lower: choice down $0.74 ($323.48) and select down $0.29 ($294.23) with a movement of 116 loads (66.85 loads of choice, 17.81 loads of select, 6.10 loads of trim and 24.91 loads of ground beef).

FRIDAY'S CATTLE CALL: Steady/somewhat higher. Any more live cattle that sell in the South will likely remain steady with the week's trend, but packers are likely going to need to up their offers in the North if they wish to get any cattle bought.

FEEDER CATTLE:

The feeder cattle complex was the rallying force behind the momentum in today's cattle market as it jumped anywhere from $2.00 to $3.00 higher. January feeders closed $3.45 higher at $266.47, March feeders closed $3.22 higher at $266.20 and April feeders closed $2.97 higher at $266.52. I highly suggest continuing to watch sales over the next month as it's likely that these prices are going to continue to impress us all as buyers know that the closer we get to spring the more money grass calves are likely to bring. At Joplin Regional Stockyards in Carthage, Missouri compared to their last sale two weeks ago, feeder steers sold $2.00 to $7.00 higher and feeder heifers sold anywhere from $2.00 lower to $10.00 higher. Feeder cattle supply over 600 pounds was 85%. The CME feeder cattle index 1/1/2025: up $0.67, $261.77.

LEAN HOGS:

The lean hog complex closed mostly higher even though some of the nearby contracts closed just slightly lower. February lean hogs closed $0.15 lower at $81.15, April lean hogs closed $0.02 lower at $86.55 and June lean hogs closed $0.25 higher at $99.42. It was a little disheartening for the market to see pork cutout values close lower but with a $8.83 decline in the belly -- a lower overall carcass price is expected. Hopefully, Friday's export report will show better demand. Hog prices on the Daily Direct Afternoon Hog Report are unchanged from the day before as pork prices averaged $80.08 on 2,916 head. Pork cutouts totaled 275.96 loads with 249.56 loads of pork cuts and 26.40 loads of trim. Pork cutout values: down $0.98, $89.32. Thursday's slaughter is estimated at 489,000 head -- 1,000 head less than a week ago and 2,000 head less than a year ago. The CME lean hog index 12/30/2024: down $0.08, $84.27.

FRIDAY'S HOG CALL: Lower. At this point, it's likely that packers have fulfilled the vast majority of their needs for the week.

Thursday Midday Markets - Southern Cattle Trading for $195 -- $2.00 to $3.00 Higher

GENERAL COMMENTS:

The livestock complex is trading mostly higher as traders have dived aggressively into the livestock complex following the New Year's holiday. Some light cash cattle trade is currently being noted in the South at $195 which is $2.00 to $3.00 higher, but otherwise, the market is still quiet. March corn is up 3/4 cent per bushel and March soybean meal is up $2.30. The Dow Jones Industrial Average is down 179.77 points.

LIVE CATTLE:

Well, if today's trade is any inclination to what the rest of the year is going to be – buckle up friends! It's been exhilarating to watch the live cattle contracts trade throughout Thursday's market as the complex is anxiously waiting to see just how the week's cash cattle trade pans out -- but traders believe so strongly about the market's fundamental position that it is continuing to trade higher. February live cattle are up $1.82 at $193.40, April live cattle are up $1.77 at $196.07 and June live cattle are up $1.87 at $191.50. A thin movement of trade has been noted in the South at $195 which is $2.00 to $3.00 higher than last week's weighed average, but otherwise, the market is still quiet. A single bid of $310 dressed is currently being offered in the North, but no Northern sales have been noted yet. Asking prices are firm in the South at $195 to $196 but are still not established in the North. Packer interest will likely improve throughout the day, but the week's trade could be delayed until Friday.

Boxed beef prices are lower: choice down $1.67 ($322.55) and select down $0.23 ($294.29) with a movement of 53 loads (29.89 loads of choice, 7.46 loads of select, zero loads of trim and 15.26 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex is rocking and rolling as Thursday's noon hour nears as most of the nearby contracts are trading anywhere from $2.00 to $3.00 higher. January feeders are up $3.57 at $266.65, March feeders are up $3.50 at $266.47 and April feeders are up $3.17 at $266.72. It will be especially interesting to watch feeder cattle sales over the next two weeks, as buyer demand will likely be strong given that the market has been on a holiday hiatus and buyers will likely have large orders to fill.

LEAN HOGS:

After trading sharply lower earlier in the week, the lean hog complex has finally found some technical footing. The spot February contract is trading slightly lower, but the rest of the 2025 and 2026 contracts are all trading higher as there's hope for better export opportunities. February lean hogs are down $0.02 at $81.25, April lean hogs are up $0.05 at $86.62 and June lean hogs are up $0.22 at $99.40.

The projected lean hog index is delayed from the source. Hog prices are unavailable on the Daily Direct Morning Hog Report because of confidentiality. However, we can see that only 345 head have traded and that the market's five-day rolling average now sits at $79.59. Pork cutouts total 123.12 loads with 107.90 loads of pork cuts and 15.22 loads of trim. Pork cutout values: up $2.17, $92.47.

Thursday Morning Livestock Market Update - Cash Cattle Expected to Trade Higher

GENERAL COMMENTS:

Cash cattle are expected to trade early Thursday as packers purchase cattle for slaughter. There is a strong possibility they are short-bought and will need to be aggressive. Feedlots are asking for more in anticipation the packers will need to step up. Traders were not shy about holding and adding to their long positions through the end of the year. Boxed beef prices slipped Tuesday with choice down $1.15 and select down $0.24 but that may not impact trade. Packers are trying to reduce slaughter to improve margins and back up cattle in the market, but that strategy has not changed the market dynamic.

Hog futures are in trouble with prices falling back to the lowest levels since October. Futures broke hard to close the year as liquidation surfaced with a vengeance. Hopefully, this was traders liquidating to close out their books for the end of the year and they may step back in to buy back into the market if futures show support. However, there has been concern over demand in the near term. Packers were aggressive Tuesday as they wanted to buy most of the hogs ahead of the new year. The National Daily Direct Afternoon Hog Report showed cash up $1.27. However, cutouts fell apart, posting a decline of $4.02. Picnics fell $9.13 with hams down $5.66. The only category showing a gain was ribs.

	BULL SIDE		BEAR SIDE
1)	March and later feeder cattle futures closed at new contract highs. This may trigger further short-covering.	1)	Continued high beef prices will impact export sales and may reduce consumer demand as the grocery bill increases.
2)	Cash cattle are expected to see further gains this week as packers seem to be short-bought.	2)	The long position held by managed-money traders is near a record. This may trigger some liquidation as the market corrects from being overbought.
3)	The liquidation of hogs may have been due to positioning for the end of the year. The break may be viewed as a buying opportunity.	3)	Pork cutouts took a big hit Tuesday, but might regain much of that loss. However, cutouts have not been able to find solid support.
4)	Demand for pork may be increasing due to the high prices of beef. More consumers may see the value of pork.	4)	Cash hogs are expected to be lower the rest of the week as packers may have purchased sufficient supply.