DTN Early Word Livestock Comments

Cattle: Steady Futures: Higher Live Equiv: $274.99 -$0.11*

Hogs: Lower Futures: Higher Lean Equiv: $119.98 +$0.17**

*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:

Live cattle futures recovered the losses of Monday and then some on Tuesday as some contracts closed at new highs. The resiliency of the market is incredible, indicating the higher trend continues. The concern over the strength of boxed beef is at the back of traders' minds. But the discount of futures to cash is the focus. The increase in cattle prices last week provides support and indicates demand remains strong. Even though boxed beef prices were mixed Tuesday, the decline of select cuts by $2.00 offset the increase in the gain of $0.63 in choice. Cash cattle are not expected to trade Wednesday, but I doubt cash trading activity will wait until the end of the week as it did last week. Feeder cattle futures seemed reluctant to regain the losses of Monday and may be an anchor on the price potential.

Hogs continued under substantial pressure early as the fourth consecutive day of liquidation continued Tuesday. However, heavy selling ran its course, allowing the market to rebound from the lows of the day. That does not mean the market will regain the losses of the past four days, but it might provide some price stability. The National Daily Direct Afternoon Hog Report showed cash increasing $3.02 on 12,537 head. The pork cutout posted a minor gain of $0.17, but not enough to renew ideas of stronger demand. The August contract took over as the lead month and closed $0.70 higher on Tuesday, as it may reduce the discount it held to the expiring July contract.

	BULL SIDE		BEAR SIDE
1)	The rebound of cattle futures, with some contracts closing at new highs, keeps the uptrend intact.	1)	Packers have been able to surround themselves with additional cattle and may not be willing to pay higher prices for cattle this week.
2)	The significant discount of the August live cattle contract to cash would indicate further upside price potential with the possibility of new all-time highs.	2)	Cattle futures are overbought and may need a further price correction to correct that market condition.
3)	The liquidating pressure on hog futures may have run its course, and buying interest may surface with the rebound of cash.	3)	Hogs rebounded from the lows on Tuesday, but will have difficulty regaining the losses under current market fundamentals.
4)	Pork cutout prices have been choppy, but the overall average price remains strong and may increase as consumers turn more to pork consumption.	4)	Traders have been disappointed that demand has not improved more than it has and maintain a substantial discount in October and later futures contracts.

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.