Monday Morning Livestock Market Update - Traders to Cautiously Begin Week

GENERAL COMMENTS:

It was another difficult week for cattle as futures continued the losses. Cash cattle traded lower for the first time in quite a few weeks. Southern live cattle traded $2.00 lower at $206 with Northern dressed cattle $1.00 lower at $328. Traders expected further weakness in cash as the February live cattle contract is trading over $5.00 below cash. Various news stories last week put pressure on the market, which may increase the desire of feedlots to move cattle rather than risk holding and taking yet lower prices. Boxed beef prices were lower with choice down $2.11 and select down $1.87. Consumer demand may be backing off due to the high beef prices. Feeder cattle prices at some auctions last week were lower in response to the weakness of live cattle. The Commitments of Traders report showed funds selling 4,533 futures in live cattle, reducing their net-long positions to 152,303. The funds sold 946 contracts, reducing their net-long position to 26,781 contracts.

Hog futures continue to hold in nearby contracts and push higher in the deferred contracts. The July and later contracts made new highs Friday as traders maintained their optimism. Cash was lower Friday with the National Daily Direct Afternoon Hog report showing a decline of $3.06. This was offset to some extent by the gain in pork cutouts of $1.36. Cash hogs continue to struggle but traders are looking ahead to the prospects of increasing demand. Slaughter continues to exceed the level of the previous week and year. The last trading day for February hog futures is on Friday. The Commitments of Traders report showed the funds adding 6,031 long positions, bringing their net-long futures position to 94,730 contracts.

	BULL SIDE		BEAR SIDE
1)	Live cattle futures hold a significant discount to cash. This may limit further selling until cash is traded this week.	1)	The potential for further tariffs being imposed will remain a dark cloud over the cattle market, limiting upside potential.
2)	The cattle market has corrected its overbought condition with the news of last week potentially factored into the market. This could generate a price bounce.	2)	Cattle futures ran too high, too fast, and are now correcting. Further weakness is possible as the market corrects.
3)	Some hog contracts continue to make new highs, keeping the uptrend intact. Traders anticipated increased demand as the year progresses.	3)	The strength of hog futures seems to be in the perception of traders for better demand. It is not fully supported by cash and cutouts.
4)	Hog slaughter remains strong with packers needed to meet demand. This is keeping hogs current.	4)	Packers may not be aggressive in the cash market as they assess weekend pork demand.

Friday Closing Livestock Market Update - Traders Find Some Technical Footing

GENERAL COMMENTS:

It was a long troublesome week for the cattle complex, but thankfully by Friday's end, most of the livestock contracts were able to close higher. Heading into next week's trade, it will be vital to check on Monday morning to see exactly how many cattle were bought in the cash cattle market this past week as that will likely indicate how aggressive packers will be next week in the cash market. March corn is down 7 3/4 cents per bushel and March soybean meal is down $5.00. The Dow Jones Industrial Average is down 444.23 points.

From Friday to Friday, livestock futures scored the following changes: February live cattle down $3.82, April live cattle down $5.53; March feeder cattle down $10.83, April feeder cattle down $10.30; February lean hogs up $3.08, April lean hogs up $1.80; March corn up $0.05, May corn up $0.08.

LIVE CATTLE:

It's been a burdensome week full of heavy-hitting news headlines that have weighed heavily upon the cattle complex. Between Monday's reaction to the tariff talks over the weekend, to APHIS's announcement that Mexican cattle imports were going to resume this week to Thursday's unraveling news that dairy cattle in Nevada had contracted a new strain of bird flu -- it's been a grim week for traders and consequently the live cattle suffered throughout the week. Thankfully the market was able to find some stability on Friday as most of the live cattle contracts closed higher, but that's not to say that all the market's uneasiness has been laid to rest as traders also dually took note that this week's cash cattle prices traded lower. Traders will likely be cautious in the marketplace next week as they continue to sort through the mess of this past week and try to regain a sense of direction for the near days to come. February live cattle closed $0.15 higher at $200.77, April live cattle closed steady at $196.77 and June live cattle closed $0.27 higher at $192.10.

Throughout the week Southern live cattle traded at mostly $206 which is $2.00 lower than last week's weighted average and Northern dressed cattle traded at $328 which is $1.00 lower than the previous week's weighted average.

Friday's slaughter is estimated at 100,000 head -- 14,000 head less than a week ago and 16,000 head less than a year ago. Saturday's slaughter is projected to be around 8,000 head. The week's total slaughter is estimated to be 584,000 head – 16,000 head less than a week ago and 33,000 head less than a year ago.

Boxed beef prices closed lower: choice down $2.11 ($321.87) and select down $1.87 ($312.90) with a movement of 155 loads (84.62 loads of choice, 12.87 loads of select, 36.79 loads of trim and 20.74 loads of ground beef).

MONDAY'S CATTLE CALL: Steady/somewhat lower. Its week's cash cattle trade will likely depend on how many cattle were bought this past week. If packers were able to buy a plethora of cattle and were consequently able to build up their supply, then it's likely that prices would trade lower. But if they are still slightly short-bought, prices may be able to remain steady.

FEEDER CATTLE:

The feeder cattle complex found mixed support throughout the day as the market still felt unsettled following the week's pressure, but some of the deferred contracts were able to close mildly higher. It is technically concerning to see that the spot March contract closed below the market's 40-day moving average, which if Monday's market continues with that trend, could open the contract up to more downside pressure. March feeders closed $0.40 lower at $264.90, April feeders closed $0.17 lower at $264.82 and May feeders closed $0.10 lower at $263.60. The Oklahoma Weekly Cattle Auction Summary shared that compared to last week, feeder steers and steer calves sold $5.00 to $10.00 lower. Feeder heifers traded $6.00 to $9.00 lower and heifer calves sold steady to $5.00 lower. Slaughter cows traded steady to $4.00 lower and slaughter bulls sold steady. Feeder cattle supply over 600 pounds was 67%. The CME feeder cattle index 2/6/2025: down $2.05, $275.59.

LEAN HOGS:

The lean hog complex kept with its rallying theme throughout Friday's close. The market wasn't able to close above its long-term resistance at $93.00, but traders could potentially take a shot at that resistance threshold next week if demand remains supportive enough. April lean hogs closed $0.40 higher at $92.15, June lean hogs closed $0.42 higher at $104.27 and July lean hogs closed $0.62 higher at $105.17. And although this afternoon's pork cutout values were a little deceiving -- seeing a higher close is always a win for complex, it's undeniable the $7.52 jump in the belly is what likely pushed the carcass price higher as most of the other cuts closed mixed. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $3.06 with a weighted average price of $83.17 on 2,104 head. Pork cutouts totaled 281.63 loads with 256.65 loads of pork cuts and 24.98 loads of trim. Pork cutout values: up $1.36, $97.00. Friday's slaughter is estimated at 489,000 head – 9,000 head more than a week ago and 8,000 head more than a year ago. Saturday's slaughter is projected to be around 102,000 head. The CME lean hog index 2/5/2025: up $0.45, $85.05.

MONDAY'S HOG CALL: Lower. Packers rarely show much interest in the cash market on Mondays and it's unlikely that next week will fall out of that norm.

Friday Midday Livestock Market Summary - Technical Support Comes with Day's Trade

GENERAL COMMENTS:

Following Thursday's immense pressure, the livestock complex has again found support and stability in Friday's trade. No new cash cattle sales have been reported and it's looking like the bulk of this week's trend is essentially done with. March corn is down 8 1/4 cents per bushel and March soybean meal is down $5.10. The Dow Jones Industrial Average is down 320.96 points.

LIVE CATTLE:

It seems as though traders have again found some technical stability following Thursday's sharp correction. It's been a burdensome week full of heavy-hitting news headlines that have weighed heavily upon the complex. Between Monday's reaction to the tariff talks over the weekend, to APHIS's announcement that Mexican cattle imports were going to resume this week to Thursday's unraveling news that dairy cattle in Nevada had contracted a new strain of bird flu -- it's been a grim week for traders and the cattle complex to sort through. April live cattle are up $0.07 at $196.85, June live cattle are up $0.45 at $192.27 and August live cattle are up $0.55 at $189.27. No new trade has been reported in the cash cattle market, and it's looking like the bulk of this week's trade is done with. So far this week Southern live cattle have traded for $206 which is $2.00 lower than last week's weighted average and Northern dressed cattle have traded at mostly $328 which is $1.00 lower than last week's weighted average.

Boxed beef prices are lower on the Daily Direct Morning Hog Report, down $1.72 ($322.26) and select down $0.24 ($314.53) with a movement of 134 loads (75.13 loads of choice, 8.77 loads of select, 35.70 loads of trim and 13.94 loads of ground beef).

FEEDER CATTLE:

After seeming unable to catch its breath throughout Thursday's trade as the market gushed lower -- the feeder cattle complex has found some support in Friday's market and is trading mostly steady to somewhat higher. March feeders are steady at $265.30, April feeders are up $0.22 at $265.22 and May feeders are up $0.52 at $264.22. It's unsettling to see the spot March contract trading around the market's 40-day moving average, which will remain a threshold traders monitor closely because if the market drops far below that level, then more bearishness will likely consume the complex.

LEAN HOGS:

Seeming unconcerned about the market's resistance, the lean hog complex continues to rally into Friday's noon hour. February lean hogs are up $0.52 at $87.15, April lean hogs are up $0.62 at $92.37 and June lean hogs are up $0.50 at $104.35. It is extremely helpful that pork cutout values are up over $1.00 this morning as demand continues to be one of the biggest driving components for the market at this time.

The projected lean hog index for 2/6/2025 is up $0.34 at $85.39, and the actual index for 2/5/2025 is up $0.45 at $85.05. Hog prices on the Daily Direct Morning Hog report average $84.49, ranging from $81.00 to $88.00 on 1,526 head and a five-day rolling average of $85.64. Pork cutouts total 202.42 loads with 183.61 loads of pork cuts and 18.82 loads of trim. Pork cutout values: up $1.65, $97.29.

Friday Morning Livestock Market Update - Lower Cash Cattle Trade Expected

GENERAL COMMENTS:

Cattle futures topped with a vengeance Thursday. The overall fundamentals have not changed, but the weakness of cash and the record-long futures positions by the funds have exaggerated the move. The April live cattle contract closed at the lowest level since Jan. 8. Cash cattle trade has been light, but lower, adding to the pressure. Cash trade will increase Friday as business needs to be done for the week. Feedlots may turn into more aggressive sellers as they realize that holding for higher cash means holding cattle over for another week and risking lower prices. Boxed beef prices were mixed Thursday with choice down $1.36 and select up $0.44. Weekly export sales were good at 24,900 metric tons (mt) indicating high beef prices did not turn away international buyers. Futures may stabilize ahead of the weekend as lower cash has been more than factored in. Feeder cattle futures have had a greater price decline than live cattle with the March contract falling nearly $13.00 from the high last week.

Hog futures showed their resilience once again. The weakness in cattle did not spill over into hogs as traders remained bullish on the market. The action on Thursday increases the possibility of futures retesting and exceeding the highs. Pork cutout values were $1.81 higher at $95.64, continuing the price uptrend. The National Daily Direct Afternoon report showed cash down $0.48. The packers were not expected to be aggressive in the cash market. They may need to finish their weekly purchases, which could result in higher cash to end the week. Export sales were strong at 50,700 mt with Mexico being the largest buyer. Saturday slaughter is estimated at 88,000 head.

	BULL SIDE		BEAR SIDE
1)	The cattle market may be overdone to the downside based on underlying cash. This may provide some stability ahead of the weekend.	1)	Cattle futures have declined over $10.00 since last week and the liquidation may not be finished as funds trim their record-long positions.
2)	Cattle numbers remain tight, which should support cattle futures for some time to come. Price retracements will be viewed as buying opportunities.	2)	Cash cattle have traded lower and could see further pressure as cash trading will increase Friday. The feedlots may move cattle aggressively to avoid possibly lower prices next week.
3)	The uptrend in pork cutout prices should support hog futures. Traders may remain interested in buying the breaks.	3)	Hog futures may have difficulty pushing above price resistance and contract highs. Traders will be willing to sell at those levels.
4)	Hog supplies are not overwhelming but sufficient. The strong slaughter pace will keep supplies current.	4)	Traders will remain cautious over the potential for tariffs to impact the market. Mexico is a large buyer of pork and a disruption of business would be devastating.