DTN Early Word Livestock Comments

Cattle: Steady Futures: Mixed Live Equiv: $274.91 +$0.82*

Hogs: Higher Futures: Higher Lean Equiv: $107.89 -$0.30*

*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 seem to have digested the recent events that cast a shadow over the market. The uncertainty triggered massive liquidation and a substantial price retracement. This moved futures from being overbought to slightly oversold in a short time. It may be difficult for traders to regain their previous bullishness, but the fundamentals of the reduced cattle supply and continued consumer demand should support the market, allowing prices to rebound somewhat. Traders will remain uncertain over what the government may come up with next, but the bottom line is cattle numbers are tight and will remain that way. Boxed beef prices were higher, with choice up $1.12 and select up $1.28. The decline of cash cattle last week had the packers more aggressive with their purchases as they were able to purchase a good amount for deferred delivery.

Hog futures opened higher but closed mixed with minimal gains and losses. Traders lack a strong reason to support the market. Packers can purchase the hogs they need without having to be very aggressive. The National Daily Direct Afternoon Hog report showed cash up $0.49 with a large volume of hogs purchased. Packers are expected to be aggressive Tuesday as they purchase hogs early in the week at the current low prices. Demand for pork seems to be strong, but not sufficient to support the market. The increased slaughter pace is satisfying demand. Hog supplies have yet to tighten. Pork cutouts declined $0.30 on Monday.

	BULL SIDE		BEAR SIDE
1)	Traders have digested the negative rhetoric of the government. This may provide support to the market.	1)	Packers were able to purchase 255 head of cattle last week for deferred delivery. That may leave them less aggressive this week in the cash market.
2)	Higher boxed beef prices provide support as they indicate consumer demand remains strong.	2)	Uncertainty over the impact of the government's intent to reduce beef prices may limit the desire for traders to buy into the market aggressively.
3)	Low pork prices compared to high beef prices should increase some demand as consumers stretch their food dollar.	3)	Hog futures opened higher Monday and then closed lower in nearby contracts, keeping the downtrend intact.
4)	The strong slaughter pace should reduce the volume of market-ready hogs and tighten supplies moving through the end of the year.	4)	Hog weights may continue to increase as feed prices are reasonable, making it feasible to feed them to higher weights and improve profitability.

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.