DTN Early Word Livestock Comments

Cattle: Steady Futures: Mixed Live Equiv: $254.80 +$0.81*

Hogs: Higher Futures: Higher Lean Equiv: $102.59 +$0.51**

*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:

Traders turned cautious Tuesday after Monday's strength. They may wait until cash cattle trade before significantly moving futures. New contract highs were confined to 2026 contracts, with February and April nearly reaching $210. Packers were able to purchase a higher number of cattle for deferred delivery last week, which may allow them to be less aggressive this week. However, if demand remains as it has been, they may need to bid higher to obtain the volume they need for slaughter. Boxed beef prices were mixed on Tuesday with choice up $1.96 and select down $0.76. However, with the gains in futures already this week, there is little reason to believe feedlots will let cattle go at lower prices.

Hogs had a strong Tuesday as renewed buying interest permeated the market. Contracts for the summer months showed the greatest gains in anticipation of improved demand. Wednesday is the last day for the May contract, with June taking over as the lead-month, carrying nearly a $9.00 premium. The June contract did reach $110 Tuesday, but could not hold that level. The National Daily Direct Afternoon Hog report showed cash down $1.02 with a weighted average of $94.27 on 8,905 head. Packers are expected to be more aggressive Wednesday as they may want to increase their ownership of hogs for this week. Pork cutouts were higher, posting a gain of $0.51. It is too early to tell whether futures will trend higher, but traders seem more optimistic.

	BULL SIDE		BEAR SIDE
1)	Cattle futures held Monday's strong gains and remain optimistic over prices. Supplies are tight and will remain that way.	1)	Feeder cattle futures left chart gaps below the market that will be filled. The gaps may be closed sooner rather than later.
	Feeder cattle contracts continue to make new highs, keeping the uptrend alive. Higher prices continue to be paid at auctions, pushing prices nearly $90 over the live cattle price.	2)	Cattle futures are overbought and due for a price correction. If cash prices are no better than steady, futures may retrace.
3)	Hogs seemed to find support as there is renewed optimism over demand and prices moving into the summer.	3)	The July hog contracts have chart gaps below the market from Monday's opening that may be filled. Technical traders will target that level.
4)	Pork cutouts may find increased support as consumers increase pork consumption during the grilling season.	4)	Hog market fundamentals do not suggest the market will maintain an uptrend. Cutouts need to show consistent strength.

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.