DTN Early Word Livestock Comments

Cattle: Lower Futures: Mixed Live Equiv: $269.59 -$1.57*

Hogs: Steady Futures: Mixed Lean Equiv: $103.33 +$1.84*

*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:

Cattle will have a difficult time regaining the losses of the past month. This was evident last week as futures fell back to the lows after the large increase Monday. Although cattle numbers remain tight, lower cash is dictating the strength of the market. Boxed beef has not provided much reason for traders to feel bullish about the market. Boxed beef on Friday declined $2.84 for choice and was down $0.79 for select. Feedlots face another week of difficult decisions on whether to hold or to sell cattle and move them the week before Thanksgiving. Packers have some cattle purchased ahead and may not be very aggressive this week, and certainly not next week. Feeder cattle prices in the country are mixed, but have been trending lower.

The strong gain at the beginning of last week was eliminated throughout the rest of the week. It was positive that futures held support at the end of the week, but market fundamentals will need to turn supportive to regain the losses. Pork cutouts were positive on Friday, posting a gain of $1.96. The cash price fell with the National Daily Direct Afternoon Hog report down $2.02. This may limit the upside potential of the market Monday. Packers may be somewhat aggressive Monday as they may want to purchase early and also take advantage of the lower prices. Futures will need to hold support, or further pressure may unfold.

	BULL SIDE		BEAR SIDE
1)	Cattle futures are oversold and could see continued strength after closing positive on Friday.	1)	There is a possibility of further cash cattle weakness this week as packers continue to reduce slaughter speeds.
2)	Cattle futures might find a bottom after the action last week. There may be a limit to the decline of cash due to low cattle supplies.	2)	It seems cattle traders have turned aggressive sellers on futures price increases for the time being. This will limit upside potential.
3)	Hog futures had a nice bounce early last week, and futures holding support after the decline may indicate a bottom for prices.	3)	Hog futures continue to struggle as market fundamentals cannot find solid support.
4)	Hog futures are oversold and could see further short-covering after prices were unable to break support on Friday.	4)	The WASDE report Friday did not show many positive price estimates for the rest of this year and 2026. This provided little long-term support for the time being.

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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