DTN Early Word Livestock Comments

		Futures	Equiv
Cattle:	Steady	Lower	Live	$270.53	-$1.80	*
Hogs:	Higher	Higher	Lean	$77.46	-$1.76	**

*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:

While beef was left out of USDA's announcement Thursday morning about purchasing American-grown and raised food products, cattle markets did get an announcement of their own later in the afternoon. USDA Rural Development announced a loan guarantee for a new beef processing facility in Dimmitt, Texas. USDA's Business and Industry Guaranteed Loan Program (B&I Program) will use funds to support construction of a locally owned USDA inspected 400 head processing facility.

Lean hog futures traded higher on Thursday, with some initial buying right at the opening bell, coming off multiyear lows. Midmorning was the timing of USDA's announcement to purchase $41 million of American-raised pork to help feed families in need. A similar program was used back in 2020-2021, which had a significantly larger dollar invested, but overall boosted the markets it purchased products from. Pork cutout values were lower yet again on Thursday afternoon, falling $1.76 on the carcass. Pork bellies fell $10.93, which was very concerning.

	BULL SIDE		BEAR SIDE
1)	The Feeder Cattle Index is currently $4.50 higher than the futures market, giving support to futures.	1)	Cattle exports were 41% lower week over week and 33% lower than the average of the last four weeks.
2)	Corn market has been under pressure during harvest from selling pressure and lower-than-expected export pace. This will help support feeder cattle prices.	2)	Weaker cash trade for cattle helped push markets lower again on Thursday.
3)	A $41 million pledge from USDA to buy pork will help boost the market.	3)	Pork bellies fell $10.93 on Thursday afternoon, now valued at $65.69.
4)	Early buying price action in lean hog futures Thursday, before any news was released, could be seen as a good sign that buyers are looking for opportunities to jump in the market after multiyear lows were traded.	4)	Commitments of Traders report will be released later Friday and the market is expecting managed money to have sold more lean hog contracts.

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

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