DTN Early Word Livestock Comments

Cattle: Higher Futures: Lower Live Equiv: $291.08 +0.10*

Hogs: Higher Futures: Higher Lean Equiv: $101.66 -$0.67**

*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 June and August live cattle contracts moved to new contract highs Wednesday, with feeder cattle moving into, but not closing, their chart gaps. Cattle futures increased for five consecutive days, as it seems evident the cattle herd will not be rebuilt anytime soon. The easing of fuel futures prices may have also had an impact. However, that has quickly reversed overnight due to the implications of President Trump's speech last night. Crude oil futures are sharply higher and may impact trade Thursday. Cash cattle have not yet traded for the week, but should be no worse than steady. With the significant increase in futures this week, packers will likely need to be aggressive to pry cattle from feedlots, as showlists are rather light. Boxed beef prices were lower on Wednesday, with choice down $1.07 and select down $0.34. However, that should not have any negative impact on the market. The impact on futures could be from some liquidation ahead of the three-day weekend, as traders may want to reduce some of their long positions.

Hog futures closed higher Wednesday, but the rebound was limited due to the lack of fundamental support. The National Daily Direct Afternoon Hog report showed cash down $0.41. Pork cutouts declined $0.67. There is a strong possibility packers will need to step up Thursday to wrap up their hog purchases for the week, resulting in higher cash. However, traders are not likely to take new positions ahead of the extended weekend. Some support could stem from the impact that the president's speech had on energy prices, which may have a greater impact on the economy as fuel prices escalate. Pork demand may improve as consumers turn from high beef prices.

	BULL SIDE		BEAR SIDE
1)	New contract highs in the June and August contracts and tighter cattle supplies should support the market.	1)	Sharply higher fuel prices may negatively impact trading activity Thursday as consumers may have less money to pay for high-priced beef.
2)	Reduced showlists and higher futures could result in packers paying higher cash this week.	2)	Packers continue to reduce slaughter. They hope feedlots will need to move cattle rather than continue feeding them to higher weights.
3)	Pork demand could benefit from high beef prices, as consumers may reach a threshold due to reduced disposable income.	3)	Hog futures may have difficulty increasing as long as traders are unable to see consistent support in cash and cutouts.
4)	Market-ready hog numbers may tighten in time as strong slaughter continues due to increased pork demand.	4)	Packers continue to have ample supplies of market-ready hogs to purchase for slaughter, leaving them less aggressive in the cash market.

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 2026 DTN, LLC. All rights reserved.