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DTN Midday Livestock Comments 08/12 11:46
Cattle Dip Lower Wednesday and Hogs Rally on Technical Support
Some light cash cattle trade has been reported in Nebraska on Wednesday, but
not enough have sold to say any sort of a trend has been established yet.
ShayLe Stewart
DTN Livestock Analyst
GENERAL COMMENTS:
Again, Wednesday, it's a mixed market for the livestock complex as the
cattle futures are trading lower but the lean hog contracts are trading higher.
Some light cash cattle trade has been reported in Nebraska on Wednesday, but
not enough have sold to say any sort of a trend has been established yet.
December corn is up 13 3/4 cents per bushel and December soybean meal is up
$3.60. The Dow Jones Industrial Average is up 32.28 points and NASDAQ is up
139.59 points.
Wednesday's WASDE report shared a mostly bearish outlook for the cattle and
beef markets of 2026. Beef production for 2026 was decreased by 321 million
pounds as fed cattle slaughter speeds are lower than anticipated, and the
market isn't seeing as many cows slaughtered either. The quarterly steer price
projections for 2026 and 2027 were disheartening compared to last month's
estimates as steers in the third quarter are expected to average $242 (down
$13.00 from last month); steers in the fourth quarter of 2026 are expected to
average $245 (down $10 from last month); steers in the first quarter of 2027
are anticipated to average $245 (down $5.00 from last month's estimates); and
steer prices in the second quarter of 2027 are expected to average $250 (down
$5.00 from last month's estimate). Cattle exports for 2026 are unchanged from
last month, but cattle imports for 2026 are increased by 73 million pounds with
the border reopening to Mexican cattle on Aug. 24.
Wednesday's WASDE report shared a mixed outlook for the pork and hog markets
for 2026. Pork production for 2026 was lowered by 79 million pounds as
slaughter speeds are lower and carcass weights are lighter. Quarterly hog
prices saw mostly supportive news as hogs in the third quarter are expected to
average $70 (up $1.00 from last month's report); hogs in the fourth quarter of
2026 are expected to average $59 (up $1.00 from last month's estimates); hogs
in the first quarter of 2027 are expected to average $62 (unchanged from last
month); and hogs in the second quarter of 2027 are expected to average $68
(unchanged from last month). Pork imports were increased by one million pounds
and pork exports were 62 million pounds for 2026.
LIVE CATTLE:
The live cattle complex is lower at Wednesday's noon hour as the market
doesn't know if the fundamental support it had hoped for will surface or not.
There's not been a great test yet in the fed cash cattle market, but the prices
the market has seen have been lower. August live cattle are down $1.77 at
$230.97, October live cattle are down $2.12 at $224.20 and December live cattle
are down $2.60 at $223.10. Some light cash cattle trade has been noted in
Nebraska at $368, which is $2.00 lower than last week's weighted average; but
there's not been enough cattle traded to say that an accurate trend has
developed just yet. It is worth noting that news is spreading of a major packer
in Kansas cutting production hours this week. If true, that will affect this
week's fed market. No other trade has been noted.
Boxed beef prices are higher: choice up $2.47 ($373.78) and select up $0.40
($350.20) with a movement of 55 loads (30.64 loads of choice, 10.00 loads of
select, 5.66 loads of trim and 8.74 loads of ground beef).
FEEDER CATTLE:
And as one would logically expect, as the live cattle complex trades lower,
so do the feeder cattle contracts. August feeders are down $3.72 at $346.45,
September feeders are down $5.52 at $339.72 and October feeders are down $6.10
at $330.60. It's unlikely the market is going to turn higher ahead of the day's
close, meaning this $3.00 to $6.00 decline will likely remain through the day's
end.
LEAN HOGS:
The lean hog complex is trading higher into Wednesday's noon hour, solely on
the support of technical traders as pork cutout values are lower and so are
cash prices. October lean hogs are up $0.85 at $84.17, December lean hogs are
up $1.07 at $75.20 and February lean hogs are up $1.00 at $78.27. The projected
CME Lean Hog Index for 8/11/2026 is down $0.05 at $95.89, and the actual index
for 8/10/2026 is down $0.15 at $95.94. Hog prices are lower on the Daily Direct
Morning Hog Report, down $1.11 with a weighted average price of $95.85, ranging
from $90.00 to $97.50 on 635 head and a five-day rolling average of $97.04.
Pork cutouts total 166.09 loads with 146.46 loads of pork cuts and 19.62 loads
of trim. Pork cutout values: down $0.19, $101.29.
ShayLe Stewart can be reached shayle.stewart@dtn.com
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