Tuesday Morning Livestock Market Update - Follow-Through Buying Is Expected

GENERAL COMMENTS:

Cattle futures pushed higher as traders became aggressive on the heels of a stronger cash cattle trade last week. Feedlots are in the driver's seat and will continue to hold for higher cash. Packers have not been able to surround themselves with many cattle. The Cattle Inventory report showed the lowest amount of cattle in feedlots since 2018. The Cattle on Feed report a few weeks ago showed the continued tightening of feeder cattle inventories. This does not indicate cattle supplies will be increasing anytime soon. Packers continue to face the fact that reduced slaughter is not going to boost supplies. It is uncertain what is going to break this cycle and increase the incentive for herd rebuilding. Boxed beef prices were higher on Monday, with choice up $2.65 and select up $2.97.

Hog futures exhibited strong buying interest with contracts closing the chart gaps that remained from last week and setting new highs in the May and later contracts. The July contract easily moved above $110 and is knocking on the door of $111, falling just shy of reaching that level on Monday. There is some evidence of hog numbers tightening amidst the outlook for increasing demand. Pork cutout values increased $1.48 on Monday. However, packers remained less aggressive with the National Daily Direct Afternoon Hog report down $1.35. It is expected that packers may follow their usual pattern and step up to purchase hogs more aggressively today.

	BULL SIDE		BEAR SIDE
1)	Strong cash cattle prices last week and the prospect for higher cash this week should continue to support futures.	1)	Cattle futures are supported but are having some difficulty maintaining a consistent uptrend. Traders are cautious over outside influences.
2)	Feeder cattle being purchased by feedlots continue to command a premium over the market in many cases. Supplies are tight, and feedlots want to keep lots full.	2)	Even though sterile New World screwworm flies have been released along the border, the threat of a case in the U.S. will remain prevalent.
3)	Hog futures moved to new contract highs in the May and later contracts, keeping traders buying and holding contracts.	3)	Packers are having no difficulty obtaining the hogs they need to maintain the strong slaughter pace.
4)	Pork cutouts continue to remain strong, indicating good consumer demand.	4)	Without the consistent support of cash, hog futures may have a difficult time seeing much further upside potential.

Monday Closing Livestock Market Update - Cattle Prices Surge

GENERAL COMMENTS:

Cattle futures surged higher at the opening bell Monday morning and maintained active gains through the entire trading session. Although live cattle futures closed well below daily highs, the ability to sustain the $2 per cwt market rally early in the week is still considered a major win. Last Friday's Cattle Inventory report was the main spark to the renewed buyer support. This report posted that overall cattle numbers were below year-ago levels, and beef cow numbers were 1% below year-ago levels. Calves born last year fell 2% from the year previous. This bullish report was encouraging for the market. But at the same time, we really don't know much more about the overall scope of the market support. Even without specific numbers, it was not unknown in the industry that cattle supplies have tightened, which has led to current price levels. The challenge in maintaining the most recent market gain is understanding how demand will react to the current supply shortages, and what will happen in the overall beef market over the next two years, when it comes to rebuilding or sustaining the current herd. Hog prices closed lower on the Daily Direct Afternoon hog report, down $1.35 with a weighted average of $82.22 on 715 hogs. March corn closed down 2 1/2 at $4.258 and March soybean meal closed up $0.90 at $294.5. The Dow Jones Industrial Average is up 515.19 at 49,407.66.

LIVE CATTLE:

Live cattle futures posted strong triple-digit gains Monday in reaction to continued bullish beef and cash market news as well as last Friday's Cattle Inventory Report. Steers weighing 500 pounds or more are down 1% from year-ago levels, with total cattle and calves on feed in all feedlots down 3% from year-ago levels. The main change in year-over-year levels is seen in reporting feedlots with fewer than 1000 head. This is a segment that is not measured in the monthly cattle on feed reports and impacts overall numbers, although not the majority of the industry. Cash cattle markets are quiet in the country this afternoon, with bids and asking prices not established. Significant trade volume will likely be delayed until much later in the week. New showlists appear to be lower in all major feeding areas, somewhat lower in Texas, but lower in Kansas, Nebraska/Colorado. February live cattle closed $2.33 higher at $238.175, April live cattle closed $2.73 higher at $239.525 and June live cattle closed $2.53 higher at $234.25. 

Monday's slaughter is estimated at 108,000 head, 8,000 head more than a week ago and 5,450 head less than a year ago. 

Boxed beef prices closed higher: choice up $2.65 ($368.21) and select up $2.97 ($364.91) with a movement of 58.44 loads (33.34 loads of choice, 8.86 loads of select, 7.12 loads of trim and 9.12 loads of ground beef).

TUESDAY'S CATTLE CALL: Steady to $1 Higher. Strong futures market support, as well as expected strength in beef values through the week, is expected to keep feeders actively pricing cattle higher than last week. It is likely to be the end of the week before active trade develops.

FEEDER CATTLE:

Feeder cattle skyrocketed higher through the day, with March futures leading the market gains at the closing bell with a $6.07 per cwt rally. The confirmation that overall cattle inventory numbers are tight in Friday's Cattle Inventory Report, which is no surprise to anyone, sparked intense buyer interest as traders now have a number to put toward this tightness and market trend. The fact that overall cow herd reductions continue through 2025 and overall calving levels were 2% lower in 2025 compared to the previous year points to continued challenges getting access to calves to supply the beef demand over the next couple of years. The focus on strong buyer support continues through all 2026 contracts with a limited price spread in all nearby futures contracts.

March feeders closed $6.08 higher at $366.35, April feeders closed $5.90 higher at $364.175 and May feeders closed $5.23 higher at $360.35. The CME Feeder Cattle Index for January 29: up $3.72, $374.41.

LEAN HOGS:

Lean hog futures posted moderate to strong gains Monday as supportive buyer interest came in from different directions. One side pointed to the rest of the livestock trade skyrocketing sharply higher based on lower-than-expected cattle inventory levels at the end of the year. But if this wasn't enough, a strong stock market and financial support flooded the market. This helped stimulate buyer support in most contract months, but the majority of support developed in spring and summer 2025 contract months. The focus on positive gains in economic markets points to support in overall demand both domestically and in export markets. This upward move has not pushed May contracts above $100 per cwt, as traders look for further market direction as the week continues. February lean hogs closed $0.50 higher at $87.75, April lean hogs closed $1.48 higher at $96.625 and May lean hogs closed $1.70 higher at $100.625. Monday's hog slaughter is estimated at 461,000 head, 35,000 head more than a week ago and 15,000 head less than a year ago. Pork Cutouts totaled 287.08 loads with 240.68 loads of pork cuts and 46.40 loads of trim. Pork cutout values are up $1.48 at $95.7. The CME Lean Hog Index for January 29: up $0.06, $85.78.

TUESDAY'S HOG CALL: Steady to $1 Higher. Firm outside market support is expected to firm price levels through the week as packers continue to gain access to market-ready hogs. The ability to sustain futures prices and advance pork values in the next few days will help to give additional direction to cash hog markets.

Monday Midday Livestock Market Summary - Cattle Futures Surge Higher

GENERAL COMMENTS:

Cattle markets are holding strong triple-digit gains at midday Monday, following the bullish cattle inventory report seen last week. The focus on total cattle numbers slightly lower than the previous year, and total calvings falling 2% in 2025 compared to the previous year, has rekindled the overall bullish buying activity across the entire livestock market. The rebound in financial markets is adding to the buyer interest with Dow Jones markets up over 500 points at times through morning trade, and less focus on economic pressure early in the week is helping stimulate both cattle and hog market buying. March corn is down 4 at $4.243 and March soybean meal is down $0.40 at $293.2. The Dow Jones Industrial Average is up 404.58 at 49,297.05.

LIVE CATTLE:

Live cattle futures surged higher early Monday morning following the bullish news from last week's cattle inventory report. The focus on overall reduction in all cattle numbers and 2025 calvings decreasing by 2% has continued to spark renewed buying support through early trade. Although contracts have backed away from initial highs, the focus on strong early week gains is likely to keep buyers active through the rest of the session. Cash cattle markets look to be a typically quiet Monday with both buyers and sellers busy taking inventory and preparing for the week ahead. Bids and asking prices have yet to be established, and if the trend of the last couple of weeks continues, significant trade volume will be delayed until much later in the week. February live cattle are $2.83 higher at $238.675, April live cattle are $3.28 higher at $240.075 and June live cattle are $3.05 higher at $234.775. 

Boxed beef prices are Higher: choice up $2.14 ($367.70) and select up $2.35 ($364.29) with a movement of 32.80 loads (20.27 loads of choice, 4.93 loads of select, 3.40 loads of trim and 4.20 loads of ground beef).

FEEDER CATTLE:

Feeder cattle futures are leading the market higher Monday morning as renewed focus on tight supplies continues to be seen through the entire cattle complex. The announcement in Friday's cattle inventory report of a 2% drop in calves born during 2025 continues to not only leave current buyers actively looking for cattle to fill yards, but it indicates that the trend will not be changing any time soon. It will be interesting to see how active buyer support remains over the next couple of days and weeks following this bullish report. Although the report gives actual numbers to the market supply tightness, the fact is that the market has already factored in much of the tightness, and this will not change the overall expectations of the beef market over the upcoming months. March feeders are $6.48 higher at $366.75, April feeders are $6.25 higher at $364.525 and May feeders are $5.75 higher at $360.875.

LEAN HOGS:

Lean hog futures have moved actively higher Monday as well. Although the same dynamics seen in the cattle market are not seen in the hog complex, the spill-over bullish support from surging cattle markets and active outside market buying activity has helped to push nearby contracts to triple-digit gains during morning trade. Spot month February futures are holding 80 to 90 cent gains through most of the morning, but the rest of nearby contracts are holding strong triple-digit gains near $2 per cwt through much of the morning. Traders continue to not only gain spill-over support from any beef market support during the year, but continued gains in financial markets are helping to keep hog market traders actively buying in initial February trade. February lean hogs are $0.85 higher at $88.1, April lean hogs are $1.98 higher at $97.125 and May lean hogs are $2.08 higher at $101. Hog Prices are unreported due to confidentiality on the Daily Direct Morning Hog report. Pork Cutouts totaled 163.86 loads with 126.44 loads of pork cuts and 37.42 loads of trim. Pork cutout values are up $0.58 at $96.98.

Monday Morning Livestock Market Update - Traders Are Expected to Support the Cattle Market

GENERAL COMMENTS:

Cattle traders were desperately looking for something to cause them to hold positions through the end of the month. The uncertainty of cash trade and the biannual Cattle Inventory report left them taking some profits ahead of the weekend. Cash cattle trade developed late, with Southern live prices trading as much as $5.00 higher, while Northern dressed cattle traded as much as $9.00 higher. That should provide support to begin the month. Packers were short-bought and should remain aggressive due to tight cattle supplies. The biannual Cattle Inventory report was not bearish to the market, showing all cattle and calves down slightly from a year earlier at 86.2 million head. Cows and heifers that have calved totaled 37.2 million, also down slightly from a year earlier. Beef replacement heifers totaled 4.71 million head, 1% above a year earlier, but that will not hurt the market. The calf crop was 2% lower at 32.9 million head. Boxed beef prices were mixed on Friday, with choice down $2.10 and select up $1.22. The Commitment of Traders report showed the fund traders adding 2,928 live cattle futures positions, increasing their long positions to 104,399. They added 1,460 long positions to feeder cattle, bringing their net-long position to 18,865 contracts.

Hog futures closed mixed with slight pressure on contracts through August, while later contracts again posted new highs. Traders had little to turn the market one way or the other. The National Daily Direct Afternoon Hog report showed cash down $0.81 and was not unexpected. Pork cutouts were higher, posting a gain of $0.79. Packers had no difficulty obtaining the hogs they needed to maintain the higher slaughter pace. The Commitment of Traders report showed that the interest remains for fund traders to add to their long positions. The net-long position totaled 109,537 futures contracts, up 17,321 contracts from the previous week.

	BULL SIDE		BEAR SIDE
1)	Cash cattle traded higher last week, which should provide support to futures. It is also a new month and may increase buying interest.	1)	Feeder cattle have been close to closing the chart gap but have been unable to do so.
2)	The biannual Cattle Inventory report was not bearish, showing cattle numbers will remain tight for some time to come.	2)	Boxed beef prices have been mixed last week. If that continues, it may limit the upside potential for futures.
3)	Hog slaughter remains very strong and indicates that demand for pork is strong. This will keep supplies from backing up in the country.	3)	Cash hogs are unable to find a solid footing, and prices remain choppy.
4)	Later futures contracts continue to make new highs with traders adding to their long positions.	4)	Hog slaughter is strong and higher than a year ago, but it is not enough to tighten the hog supply in the country.