Hogs
Price action: February lean hog futures rose 42 1/2 cents to $82.275, near mid-range, hit a three-week high early on and for the week up $1.275.
5-day outlook: Today’s technically bullish weekly high close and much-improved near-term chart posture for lean hog futures sets the table for more speculator buying interest next week. A price-stabilization in the cash hog market is also bullish, suggesting the cash market has put in a seasonal price bottom. More African Swine Fever cases discovered in Spain have also given lean hog bulls a boost on ideas of better U.S. pork exports with Spanish pork being banned by some countries.
The latest CME lean hog index is up 16 cents to $81.83. Monday’s projected cash index price is down 2 cents to $81.81. The national direct five-day rolling average cash price today is $70.42. The noon report today showed pork cutout value up $3.50 to $96.83, led by gains in cuts across the board. Movement at midday was decent at 206.40 loads.
30-day outlook: Holiday demand for hams is likely one factor that has helped to stop the slide in cash hog and hog futures prices. Still historically high beef prices at the meat counter are also likely pushing consumers to buy the less-expensive pork cuts. The USDA quarterly hogs and pigs report and monthly cold storage report should be coming out this month, which hog futures trades will closely examine.
90-day outlook: Recent U.S. trade deals have hog producers hopeful for better global demand for U.S. pork in the coming months—especially as number-two world exporter Spain deals with African Swine Fever. China is a major pork importer, and U.S-China relations are presently on the upswing. That’s a positive for the hog and pork futures markets.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all your soymeal needs covered through December in the cash market. You are hand-to-mouth for corn-for-feed needs.
Cattle
Price action: February live cattle futures rose $3.15 to $227.15, near the daily high and hit a three-week high. For the week, February live cattle rose $11.225. January feeder cattle futures closed up $2.475 at $339.05, nearer the daily low and hit a four-week high early on. For the week, January feeders were up $15.075.
5-day outlook: It was a very good week for the cattle futures markets bulls, including technically bullish weekly high closes today that set the stage for follow-through technical buying early next week. Solidly higher cash cattle trade this week also encourages the cattle futures markets bulls. Wintry weather in the Plains states that has likely and will likely continue to stress livestock is also price-friendly.
Active cash cattle trading late this week sees USDA reporting at midday steers fetched an average price of $220.02 and heifers $220.03. That is well up from last week’s average cash cattle trade reported by USDA at $211.53. The noon report today showed boxed beef cutout values a bit weaker, with Choice-grade losing 4 cents to $362.68, while Select-grade fell 84 cents to $349.48. Movement at midday was good at 100 loads. The Choice-Select spread is presently $13.20.
30-day outlook: U.S. consumer demand for beef at the meat counter remains robust, with better demand coming from retailers featuring beef cuts for holiday meals. Carcass weights continue to increase and reached an all-time high of 960 pounds this week--up 3 lb. from the previous week and 41 lb. higher than one year ago. Quality continues to ramp up as dairy/beef crosses, which produce very high quality grade, are reducing the importance of the Select category. We wouldn’t be surprised to see grocers offer more prime cuts available this holiday season. These factors should keep a floor under cash cattle prices, support wholesale boxed beef values and beef packer margins in the coming weeks.
90-day outlook: Perspective from Farm Bureau economist Bernt Nelson: “Falling cattle prices are coming at a time when cattle farmers are typically making decisions about whether to hold back heifers for breeding or place them on feed. Retaining heifers for breeding could lead to herd expansion in 2028, but with input costs at near-record levels and prices still 25% higher than a year ago, there is a lot of incentive for farmers to market cattle rather than hold them back for breeding. Fundamentally, this means cattle supplies will likely remain tight through 2026, which will delay expansion even further.”
What to do: You are hand-to-mouth for corn-for-feed needs. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: For soymeal, you have full coverage in cash through December. You are hand-to-mouth for corn-for-feed needs. Be prepared to make additional purchases. Be prepared to make additional purchases if value prices continue.