DTN Early Word Livestock Comments

Cattle: Lower Futures: Lower Live Equiv: $264.53 -$0.65*

Hogs: Higher Futures: Higher Lean Equiv: $108.59 -$1.18**

*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:

Once cattle futures found support, they continued to increase as traders turned bullish. The overall support continues to come from tight supplies. Boxed beef prices seemed to have found support earlier in the week, but were lower Thursday. Choice boxed beef declined $0.94, with select down $0.91. This may not indicate the weakness will resume, but may indicate some stability. Cash cattle have not traded this week as feedlots believe they can get at least steady cash due to the strong gains in futures. Packers have not been aggressive, as they have some cattle on hand, and they have reduced slaughter rates. Feeder cattle posted strong gains as the outlook for a tighter supply continues to be bullish. November feeder cattle futures have increased $21.65 so far this week. The market may take a breather Friday with selling pressure into the weekend.

Hog futures cannot catch a break, moving in the opposite direction of cattle so far this week. The cash market or cutouts have not provided support throughout the week. The National Daily Direct Afternoon Hog report was down $2.72. They are expected to be more aggressive Friday as they likely need more hogs to finish out the week; but the bounce will be minimal in comparison to the weakness so far. Pork cutouts declined $1.18, keeping this week's bearishness intact. The October contract will stop trading Tuesday, with the December contract holding nearly a $13.00 discount.

	BULL SIDE		BEAR SIDE
1)	Feedlots have been holding for at least steady cash and may continue to hold for higher cash due to the sharp rise in futures this week.	1)	Boxed beef prices slipped Thursday, possibly indicating demand may not be as good as anticipated.
2)	New contract highs in cattle futures continue to provide confidence for traders to continue to add to their long positions.	2)	Some liquidation might take place Friday as traders may take some profits off the table ahead of the weekend.
3)	Traders may short-cover into the weekend as the market is oversold, and they may want to take some profits off the table.	3)	Heavier-weight hogs and the increased slaughter pace keep the market well supplied with pork.
4)	Packers may be more aggressive in the cash market as they need more hogs and prices have declined throughout the week. It will be a good buying opportunity.	4)	Packers have not had to be aggressive to purchase supplies this week. The supply of market-ready hogs is plentiful.

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.