DTN Early Word Livestock Comments

Cattle: Steady Futures: Mixed Live Equiv: $216.69 +0.25*

Hogs: Lower Futures: Mixed Lean Equiv: $93.71 -$0.80**

*Based on formula estimating live cattle equivalent of gross packer revenue. (The Live Cattle Equiv. 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:

Trading began with a little bit of optimism but fizzled out as Monday progressed. Traders seemed to turn a little less optimistic in their hope for cash this week. This was not driven by boxed beef, which was steady to higher at midday and closed higher for the day. Choice gained $0.40 with select up $0.30. Cattle futures were overbought, which likely was a factor impacting trading activity, but not until after futures pushed to higher highs in the February through August live cattle contracts. Feeder cattle had a similar move but did not make a higher high before falling back. Feeder cattle were trading mixed at auctions Monday.

Hog futures desperately needed something bullish to resume the uptrend, but that did not materialize Monday. Both cash and cutouts were down at midday and remained lower into the close. The National Daily Direct Afternoon Hog report showed a decline of $0.89 with the weighted average moving to $60.87. Cutouts declined $0.80 with most of the weakness in bellies, which showed a decline of $6.49. This may put further pressure on the market Tuesday. Packers may not be as aggressive, seeing weakness in cash and cutouts and the possibility of further weakness Tuesday.

	BULL SIDE		BEAR SIDE
1)	Higher highs Monday point to continued higher prices following the uptrend. Higher boxed beef and at least steady cash should provide support.	1)	Further selling pressure could take place as cattle futures correct from being overbought.
2)	The setback might be temporary as underlying fundamentals remain friendly with tighter numbers projected into 2025.	2)	International interest is mediocre, which leaves more beef supply available for the domestic market, putting pressure on the futures.
3)	The strong slaughter pace will require packers to be aggressive in looking for hogs. This should keep cash steady to higher.	3)	Lower cash hogs and cutouts Monday may influence further weakness in futures Tuesday.
4)	There is optimism for exports to improve as international interest increases. This may minimize the downside potential.	4)	Further futures price weakness may be seen Tuesday as the market remains overbought.

**

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

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