DTN Early Word Livestock Comments

Cattle: Steady Futures: Lower Live Equiv: $266.43 -$3.00*

Hogs: Lower Futures: Mixed Lean Equiv: $123.20 -$0.91**

*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:

The cattle complex has incredible support with traders continuing to add to their long positions without reservation. Traders who have been trying to pick a top in the maket continue to get run over and forced out of the market. Stops continue to be triggered, adding to the upward momentum in the market. Cash has not yet traded this week and is not expected to trade until Friday. Boxed beef prices showed further weakness Wednesday, with choice down $4.98 and select down $2.55. The upcoming Cattle on Feed report and the Cattle Inventory report will be released Friday after the close. Traders may begin to position themselves ahead of the report, resulting in mixed trading activity. Analysts estimate on-feed numbers at 99.1% of a year ago; placements are estimated to average 98.1%; and marketings at 96.1%. The biannual Cattle Inventory report will show inventory as of July 1, 2025. Due to the report having been discontinued last year, the numbers will be compared to 2 years ago. The estimates are for all cattle and calves at 98.1% of 2 years ago. Beef replacement heifers at 97.0%. Dairy replacement heifers at 100.6%. The annual calf crop is estimated at 97.8%.

Hog futures showed little volatility, with contracts closing mixed. There has not been much fundamental news to move the market. Demand seems to be holding with slaughter steady. Packers stepped up on Wednesday to purchase hogs and paid more money to obtain them. They were able to purchase quite a few hogs on Tuesday, but needed more to fill the needs for the week. The National Daily Direct Afternoon Hog report showed cash up $1.02 with 11,227 head purchased. Pork cutout values declined $0.91. Hog futures are consolidating, with traders uncertain whether increased demand will surface due to high beef prices or if the supply of pork will be sufficient to fill demand without having to raise prices.

	BULL SIDE		BEAR SIDE
1)	There is no ceiling to beef prices as demand remains strong and supply is tight. New contract highs continue to be established.	1)	Boxed beef prices continue to decline and will have an impact on cattle prices. Consumer demand has slowed seasonally, but high beef prices may continue to impact demand.
2)	Feedlots intend to hold for higher cash this week as futures have continued to increase. They may hold cattle over if they do not receive what they want.	2)	Cattle futures are overbought, and profit-taking could take place as traders position themselves ahead of the reports.
3)	Hog futures are consolidating and possibly building support. Traders may feel confident prices will hold and buy into the market.	3)	The weekly hog weight increased 0.2 pounds last week. This is not much change but unusual considering the increased temperatures that have been experienced.
4)	The weekly hog weights are 0.7 pounds lower than a year ago, averaging 282.9 pounds.	4)	Packers have not had to be aggressive to procure the hogs they need. There is no lack of market-ready hogs.

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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