DTN Early Word Livestock Comments

Cattle: Higher Futures: Higher Live Equiv: $267.69 -$1.67*

Hogs: Higher Futures: Mixed Lean Equiv: $105.95 -$1.79**

*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:

It was surprising to see the selling pressure on cattle futures in the face of stronger cash cattle trade. Southern live cattle traded $2.00 to $3.00 higher on Thursday while Northern dressed cattle sold $3.00 to as much as $5.00 higher than the previous week. So why the sell off? The choice boxed beef price in the morning report was down $5.10, coupled with the inability of futures to push higher even though higher cash cattle trade had been expected. Selling pressure pushed futures low enough to trigger stops, resulting in contracts pancaking lower. Once the selling gains momentum, it can be difficult to stop. Logically, futures should rebound Friday unless traders decide to remain sidelined into the weekend. Afternoon boxed beef prices were mixed, with choice down $4.11 and select up $1.72.

Hog futures followed the same direction as cattle but with less pressure. However, triple-digit losses are not what farmers wanted to see. The concern is that cash and cutouts are not showing the continued strength that traders need to see to turn the market higher. There have been three days of lower highs and lower lows with contracts declining below support on Thursday. There may be a reprieve in selling ahead of the weekend, but not a strong rebound. The National Daily Direct Afternoon Hog report showed cash down $0.71. Pork cutout values declined $1.79. The strong slaughter pace suggests demand remains strong, but pork supplies are plentiful.

	BULL SIDE		BEAR SIDE
1)	The decline in cattle futures on Thursday was not the result of lower cash trade, but technically driven. Futures may rebound Friday.	1)	The pressure on cattle futures, despite a stronger cash cattle trade does not bode well for the market. It will increase caution, with traders less likely to buy back into the market aggressively.
2)	Cash cattle have traded higher and will remain that way to finish out the week. Packers were short bought and needed cattle.	2)	Boxed beef prices have not seen the support anticipated earlier this week. Traders became disappointed.
3)	Hogs are oversold and could bounce as traders may cover short positions ahead of the weekend.	3)	Hog futures have been unable to find a bottom despite the large decline over the past three weeks.
4)	Hog slaughter remains strong, indicating good demand. Hog weights have been declining, indicating supplies are not backing up in the country.	4)	Traders are looking for consistent strength in both cash and cutouts, but have been unable to find it.

For our next livestock update, please visit our Midday Livestock comments between 11 a.m. and noon CDT. 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 2026 DTN, LLC. All rights reserved.