GENERAL COMMENTS:
Last week was another banner week for cash cattle, with Northern dressed cattle trading as much as $12.00 higher, while Southern live cattle traded $6.00 higher. Futures reflected the higher cash with stronger prices for the week. However, even with the volatility, the price changes for the week were the least they have been for a while. Last week, Feb live cattle had a $6.125 range, and Jan feeders had a $12.50 range. That is the narrowest range for February live cattle since the week of Oct. 3, with January feeders having the narrowest since the week of Oct. 17. Neither live cattle nor feeder futures closed the price gaps remaining in the market. There is an indication that packers have purchased a significant number of cattle ahead for the remainder of the month. Boxed beef prices closed mixed on Friday, with choice down $0.67 and select up $0.76. JBS is closing its Swift Beef Company facility in Riverside, California, on Feb. 2, 2026. The company indicates the closing is not due to tight beef supplies, but to streamline operations.
Hog futures were able to close higher, but the gains were not due to stronger cash or cutouts, but due to continued optimism. The gains in futures were not large, but they were gains. The December contract is off the board with February as the spot month. The June contract closed above $100 and the highest close since Oct. 22. The National Direct Afternoon Hog report showed cash down $0.41. Pork cutouts declined $0.63. Cutouts have been higher for the week, which increases the confidence of traders to buy into the market and hold current positions.
| BULL SIDE | BEAR SIDE | ||
| 1) | Substantially higher cash cattle in the past two weeks indicate overall support remains strong. |
1) | There is an indication that packers have purchased a significant number of cattle to meet their needs for the remainder of the year. |
| 2) | Cattle futures have chart gaps above the market that may be filled sooner rather than later. |
2) | Boxed beef prices continued to weaken with overall lower cutout prices last week. Demand has slowed over the past few weeks. |
| 3) | The trend in hog futures remains higher with traders gaining confidence over further strength. The funds continue to add to their long positions. |
3) | Packers remain less aggressive in the cash hog market with higher weights allowing them to purchase fewer hogs. |
4) |
Pork cutouts found further support last week. Demand has been improving. |
4) | Hog futures may be overbought and ready for a price correction soon. |
