DTN Early Word Livestock Comments

Cattle: Lower Futures: Mixed Live Equiv: $276.49 -$2.15*

Hogs: Higher Futures: Higher Lean Equiv: $118.02 +$0.10**

*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:

The tightness of cattle supplies overrode the need to liquidate some long positions ahead of the Cattle on Feed report Friday. For quite some time now, it has not mattered what the report showed; cattle futures continued to increase. The August report was friendly, but the market reached a peak shortly thereafter. The same may be true this time. The report showed on-feed numbers on Sept. 1 at 99.0% compared to the estimate of 99.2%. Placements in August were 90% of the previous year, compared to the estimate of 91.3%. Catlte marketed in August were 86% compared to the estimate of 87.1%. The report is considered slightly bullish and should support the market. However, the bullish aspect of the report may be offset by the weakness of cash and boxed beef. Cash cattle traded $1.00 lower in the South and upwards of $6.00 lower for dressed cattle in the North. Boxed beef prices took a hit again, with choice down $3.76 and select down $1.39. This may override the bullish aspect of the report. The Commitments of Traders report showed fund traders selling 3,522 live cattle futures contracts, reducing their new long position to 123,750. They increased their net-long feeder cattle position by 102 contracts to 25,412.

Hog futures continue to hold well with the market rejecting the lows again Friday. There was not much to move the market on Friday, resulting in a mostly higher close. The only weakness was seen in the December contract, which was down slightly. The National Daily Direct Afternoon Hog report showed cash down $1.99. Pork cutout values increased $0.08, providing little support to end the week. Despite limited support from cash and cutouts, hog futures have been able to hold support. Over the past two weeks, the packers have been aggressive in starting the week, paying higher cash as they want to procure hogs earlier rather than later. The same may be true this week. The Commitments of Traders report showed fund traders adding 9,198 long hog contracts, increasing their net-long position to 140,301.

	BULL SIDE		BEAR SIDE
1)	August placements were lower than trade expectations and 10% below the same period last year.	1)	The Cattle on Feed report may not be sufficient to offset the lower cash last week.
2)	Cattle supplies will remain tight for the foreseeable future, which should continue to provide support to the market.	2)	Boxed beef continues to fall, indicating demand has slowed. This may keep packers less aggressive and futures trending lower.
3)	Hog futures continue to hold support with the lean hog index nearly $8.00 above futures.	3)	Hog futures have not been able to reach back up to the recent highs and resume an uptrend.
4)	Hog slaughter has been increasing, indicating demand may be improving.	4)	The cash market has been unable to find solid support as hog supplies remain plentiful.

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.

Robin Schmahl can be reached at rschmahl@agdairy.com

(c) Copyright 2025 DTN, LLC. All rights reserved.