DTN Early Word Livestock Comments

Cattle: Mixed Futures: Mixed Live Equiv: $230.71 +$0.01*

Hogs: Lower Futures: Mixed Lean Equiv: $102.25 +$0.01**

*Based on the formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. The index has been updated to depict recent changes in live cattle weights and grading percentages.)

** based on formula estimating lean hog equivalent of gross packer revenue.

GENERAL COMMENTS:

Thankfully, live cattle recovered from the lows on Thursday to post only minor losses. Feeder cattle moved similarly but closed with greater losses. Cash still has not provided solid direction as trading activity has been limited. So far some trade has taken place at steady money with last week, and some $2.00 lower. This leaves traders guessing and limits any reaction to the delay of tariffs on Mexico. Weekly export sales were lower than the previous week and year at 13,400 metric tons (mt). This was not a reflection of tariffs but a reaction to high beef prices. Boxed beef prices were mixed with choice down $0.42 and select up $0.98. Feeder cattle at auctions remain in strong demand but there have been some mixed prices this week. Feedlots were not as willing to write larger checks given the political uncertainty.

Hog contracts through August closed with triple-digit gains and fell into negative territory in later contracts Thursday. The delay of tariffs on Mexico and Canada for goods covered under the USMCA trade agreement provided support to the market. The National Daily Direct Afternoon Hog report showed packers remained aggressive with cash up $0.49. Cutouts gained only a penny from the previous day at $96.49. Hog futures have posted strong gains over the past two days, but it is too early to tell whether futures have established strong support. Weekly export sales were strong at 42,400 mt. Saturday slaughter was revised higher to 96,000 head as the packers wanted to make up for lower slaughter due to the weather earlier in the week.

	BULL SIDE		BEAR SIDE
1)	If cash cattle trade is steady this week, it should support live cattle futures. Traders feel the market may have found a bottom.	1)	High beef prices seem to have impacted demand for the time being. Traders may remain cautious ahead of the weekend, keeping the upside price movement limited.
2)	The delay of export tariffs on Mexico and Canada again may provide support as meat trade may not be disrupted for at least another month.	2)	Steady cash trade may already be factored in the market, and the strength in live cattle futures limited.
3)	Hogs showed strong gains on the delay of tariffs on goods covered under the USMCA agreement. More time allows for further negotiations and could result in no tariffs.	3)	Packers likely have sufficient hogs purchased for the week. Cash is expected to be lower Friday.
4)	The liquidation seems to have subsided in hog futures with the market correcting from its oversold condition.	4)	Hog traders may be cautious ahead of the weekend and quickly developing political news.

For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CST. Also, stay tuned to our Quick Takes throughout the day for periodic updates on the futures markets.

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Farmers face a rapidly changing political environment as they gear up for spring planting. The news around tariff negotiations, budget cutting efforts and potential tax reform may keep the markets guessing, but our experts will help farmers put the news into perspective. Join us March 7, 2025, for DTN's next Ag Summit Series: "Spring Forward: Ag Policy, Weather Trends and Market Insights" by registering at https://dtn.link/….

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Robin Schmahl can be reached at rschmahl@agdairy.com

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