Wednesday Morning Livestock Market Update - Up, Up and Away!

GENERAL COMMENTS:

There seems to be no ceiling in the cattle market. New contract highs and strong gains keep traders bullish. The market is overbought, but traders do not seem to care. Managed money traders have a record-long position in feeders and may have the same in live cattle by this time, but traders do not care. The strength of boxed beef and the strong potential for higher cash cattle this week are driving the market higher. One would think oxygen is getting thinner at these levels, but until demand slows and cattle supplies loosen, who knows where prices will go? Boxed beef was higher on Tuesday with choice up $2.37 and select up $1.41. Slaughter is running lighter, but cattle weights are higher. The bi-annual Cattle Inventory report will be released on Friday and is expected to show bullish numbers.

Hogs have followed cattle higher but not to the same extent. New contract highs were made in the June through October months. June and July pushed back above $104 as traders are buying for the long term. Packers were aggressive on Tuesday with the National Daily Direct Afternoon Hog report up $3.93 and the weighted average price at $84.32. Pork cutout values declined $0.30. The more aggressive nature of packers over the past two weeks might indicate hog numbers have tightened a little and they are more aggressive to purchase what they need. Further gains are expected in futures Wednesday as the trend is higher. The April contract is poised to break above technical resistance at $91.25.

	BULL SIDE		BEAR SIDE
1)	The cattle market is bullish and without negative news there may be nothing to slow it down. Prices may continue to climb.	1)	The cattle market is overbought and any negative news could trigger profit-taking.
2)	Cattle numbers are tightening and that will continue for some time in the future. The cycle to rebuild may take 2 to 3 years.	2)	Historically, when a market moves rapidly higher and it moves to levels outside the realm of normal, the market generally falls faster than it rose. Once liquidation begins, cattle traders may sell quickly.
3)	Hogs are in demand and the packers are aggressively purchasing them to fill slaughter needs and pork demand.	3)	It seems much of the increase in hog futures is due to the perception that pork demand will improve and not by the current cutout values.
4)	New contract highs in some hog contracts should bring in more buying interest as traders feel confident over higher prices.	4)	Hog futures may have difficulty moving higher without the further indication of stronger prices.

Tuesday Closing Livestock Market Update - Traders Push Contracts Higher Again

GENERAL COMMENTS:

The livestock complex had yet another momentous day as all three of the markets closed higher and the cattle contracts again scored new life of the contract highs. Asking prices in the South are noted at $208 to $210 but are still not established in the North. March corn is up 3 1/4 cents per bushel and March soybean meal is up $0.80. The Dow Jones Industrial Average is up 136.77 points.

LIVE CATTLE:

The live cattle complex once again scored another higher close for the day as the market's momentum is truly unmatched at this point. Trader's buy-in of the market's long-term bullish trajectory has seemed to become utterly undeniable this past week as they continue to advance the contracts higher and higher, day by day. February live cattle closed $2.87 higher at $208.55, April live cattle closed $3.45 higher at $207.27 and June live cattle closed $3.15 higher at $201.35. The cash cattle complex still hasn't seen any sizeable trade develop as feedlot managers are once again aiming to trade cattle higher again this week. Asking prices are noted in the South at $208 to $210 but are not yet established in the North. Some packer interest could begin to surface on Wednesday, but trade will likely be delayed until Thursday or Friday. 

Tuesday's slaughter is estimated at 124,000 head -- steady with a week ago and 3,000 head less than a year ago.

Boxed beef prices closed higher: choice up $2.37 ($332.45) and select up $1.41 ($321.96) with a movement of 126 loads (75.63 loads of choice, 22.58 loads of select, 15.83 loads of trim and 11.64 loads of ground beef).

WEDNESDAY'S CATTLE CALL: Higher. With the help of the board, it's likely feedlot managers will once again be able to trade cattle higher this week as packers are still short bought.

FEEDER CATTLE:

With the active support of the live cattle contract's higher trade, it was a no-brainer for the feeder cattle market to also trade higher amid such support from traders. March feeders closed $3.00 higher at $278.25, April feeders closed $3.37 higher at $277.80 and May feeders closed $3.47 higher at $276.27. Today's higher close is yet again another achievement of new all-time contract highs in many of the nearby contracts. At Joplin Regional Stockyards in Carthage, Missouri compared to last week feeder steers traded $2.00 to $10.00 higher. Feeder heifers weighing under 450 pounds sold $4.00 to $8.00 lower, but the heavier weighted heifers sold $2.00 to $10.00 higher as well. Feeder cattle supply over 600 pounds was 65%. The CME feeder cattle index 1/27/2025: not available at this time.

LEAN HOGS:

The lean hog complex was also able to close fully higher as the market continues to year to trade higher and hopefully take out its nearby resistance at $91.00. The market wasn't able to accomplish that goal today, but traders once again came close to that threshold. It was a little disappointing to see pork cutout values dip slightly lower, which will make it all the more important for traders that demand is supportive on Wednesday if they're going to be able to take on the technical goals at hand. Hog prices closed higher on the Daily Direct Afternoon Hog Report, up $3.93 with a weighted average price of $84.32 on 3,280 head. Pork cutouts totaled 335.29 loads with 277.78 loads of pork cuts and 57.51 loads of trim. Pork cutout values: down $0.30, $92.86. Tuesday's slaughter is estimated at 489,000 head -- 7,000 head more than a week ago and 3,000 head less than a year ago. The CME lean hog index 1/24/2025: up $0.02, $81.94.

WEDNESDAY'S HOG CALL: Steady. Hog prices were notably higher today, but the week's volume will need to increase still before the week concludes.

Tuesday Midday Livestock Market Summary - Traders Continue to Propel Contracts Higher

GENERAL COMMENTS:

It's another prosperous rallying day for the livestock complex as all three markets are trading higher into Tuesday's noon hour. Still no substantial cash cattle trade has developed but asking prices are now noted in the South at $208 to $210. March corn is up 5 1/2 cents per bushel and March soybean meal is up $0.20. The Dow Jones Industrial Average is up 109.53 points.

LIVE CATTLE:

The live cattle complex is continuing to rally aggressively as traders' support is simply unwavering at this point. Even though the contracts continue to press into new, life of the contract high price points, traders are actively advancing the market without question as they continue to see the validity and merit of the market's long-term bullish trajectory. February live cattle are up $2.72 at $208.40, April live cattle are up $3.45 at $207.32 and June live cattle are up $3.02 at $201.22. Asking prices are noted at $208 to $210 in the South but are still not established in the North. It's assumed that cattle will trade steady/somewhat higher again this week, but trade will likely be delayed until Wednesday or later.

Boxed beef prices are higher: choice up $2.46 ($322.54) and select up $2.36 ($322.91) with a movement of 86 loads (48.97 loads of choice, 13.36 loads of select, 14.14 loads of trim and 9.51 loads of ground beef).

FEEDER CATTLE:

The feeder cattle complex was leery of being too overly ambitious through Monday's market, but low and behold, once traders saw the aggressive surge of the live cattle contracts, the feeder cattle market began to rally as well. March feeders are up $2.65 at $277.95, April feeders are up $3.05 at $277.47 and May feeders are up $3.20 at $276.00. With the expectation that fed cattle prices will trade steady to somewhat higher again this week, the feeder cattle market could likely see all the support it needs throughout the rest of the week so long as the market's fundamentals prevail.

LEAN HOGS:

Traders are again up against resistance levels as they continue to see the fundamental support of stronger pork cutout values and are eager to advance the contracts. But now that the nearby contracts are at resistance levels, traders are going to have to decide if the market's momentum and support are strong enough to justify trading above the resistance at $91.00 in the spot April contract. Traders will continue to closely monitor pork demand in the days ahead as demand is crucial right now as they weigh their technical options.

The projected lean hog index for 1/27/2025 is up $0.17 at $82.11, and the actual index for 1/24/2025 is up $0.02 at $81.94. Hog prices are higher on the Daily Direct Morning Hog Report, up $5.34 with a weighted average price of $83.34, ranging from $77.00 to $85.00 on 1,095 head and a five-day rolling average of $81.23. Pork cutouts total 205.05 loads with 170.55 loads of pork cuts and 34.50 loads of trim. Pork cutout values: up $0.49, $93.65.

Cattle on Feed Down One Percent

Cattle and calves on feed for the slaughter market in the U.S. for feedlots with a capacity of 1,000 or more head totaled 11.8 million head on January 1, 2025. The inventory was one percent below January 1, 2024. The inventory includes 7.25 million steers and steer calves, up one percent from the previous year. This group accounted for 61 percent of the total inventory. Heifers and heifer calves accounted for 4.58 million head, down three percent from 2024. “This report was about as bullish of a report that cattlemen could have hoped for,” says DTN Livestock Analyst ShayLe Stewart. “It’s a relief to see more marketings taking place, which, in combination with lighter placements, helped decrease the total number of cattle on feed.” Marketings of fed cattle during December totaled 1.74 million head, one percent higher than last year. Other disappearances totaled 59,000 head during December, two percent below 2023.