DTN Early Word Livestock Comments

Cattle: Lower Futures: Higher Live Equiv: $276.24 +$1.23*

Hogs: Lower Futures: Mixed Lean Equiv: $106.48 +$0.22*

*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 market was desperately searching for something to stem the liquidation Wednesday and found it when the Secretary of Agriculture Brooke Rolllins confirmed cattle imports from Mexico will not resume anytime soon. The reopening of the border was one of the bearish points that put pressure on the market. How much impact beef imports from Argentina will have is questionable, but it is a factor that will still need to be considered. Cash cattle did not trade Wednesday. If cattle futures are stronger Thursday, feedlots may wait until Friday to sell cattle. If there is weakness, they may be willing to sell cattle today. Boxed beef closed higher with choice up $1.73 and select up $1.79.

Hog futures spent time in positive territory Wednesday but were unable to hold gains into the close, except for the October and December 2026 contracts. The lower highs and, in some cases, lower lows do not indicate a market that is ready to turn higher. As anticipated, packers were not aggressive on Wednesday with the Daily Direct Afternoon Hog report showing a decline of $2.50. Pork cutout values increased $0.22, but are far from providing solid support to the market. Unfortunately, hog weights increased last week by 1.1 pounds, averaging 292.2 pounds. This keeps plenty of pork available to the market.

	BULL SIDE		BEAR SIDE
1)	The Mexican border will remain closed with no indication of it reopening anytime soon. Cattle supplies will remain tight.	1)	Even though the Mexican border will remain closed, uncertainty in the market may limit the upside potential for cattle prices.
2)	Traders may feel more confident about the continued strength of beef prices even though there is uncertainty about what the government will do next. Consumer demand remains strong.	2)	Cash cattle trade is expected to be lower, with feedlots being willing to move cattle rather than take a chance on prices next week.
3)	Hog futures are very oversold. The last time they were at this level, the market moved substantially higher.	3)	Weekly hog weights increased by 1.1 pounds to an average of 291.2 pounds. This is 5.2 pounds above a year ago, keeping pork supplies plentiful.
4)	Packers continue to process a lot of hogs, which should eventually tighten supplies.	4)	Hog futures have been unable to find technical support, keeping the downtrend intact.

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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