Grain and livestock futures are higher early Monday.
Cattle Make Fresh Highs on Bullish COF
Live and feeder cattle futures made new highs for the move Monday morning after a strong close Friday and higher weekly closes. However, the big catalyst is the bullish USDA Cattle on Feed Report data according to Rich Nelson of Allendale, Inc.
Cattle on feed was 2% below December 1, 2024. Placements in feedlots during November totaled 1.60 million head, 11% below 2024. Placements were the lowest for November since the series began in 1996. Marketings of fed cattle during November totaled 1.52 million head, 12% below 2024. Marketings were the second lowest for November since the series began in 1996.
Nelson says the Cattle on Feed placements numbers at 88.8% was extremely bullihs, “We’ve got eight months in a row now of lower than last year placements. They’ve ran about 7 % below last year’s level. So the period from now through early summer will be a little tighter supplies as far as from a feedlot perspective.”
Nelson says the on feed number at 2.2% below a year ago is also a reminder of how historically tight cattle inventory is but with a caveat. “This does tighten our supply argument here quite a bit here. One thing which we will point out, though, as we’ll watch very carefully, is some of this bullish news in recent weeks and months has been kind of offset by the packer-led declines and slaughter numbers. We’ll have to watch very carefully how well they react to this in these coming where the feed lot itself tightens up, and we’ll see if they’re still going to be trying to cut back on numbers.
Cash Cattle Trade Mixed
Cash cattle trade picked up at the end of the week. Cash in the South was at $228 live, down $2 from the previous week under very light volume. A very light dressed trade was reported in the North Friday at mostly $354 to $355, steady to $1 higher than last week’s weighted average, but $3 to $4 lower than most of the volume which was at $358, up $4 from the previous week’s business in Nebraska. Live cash sales at $228 were steady to $2 lower than the previous week in the North.
Boxed Beef Strengthens
The wholesale beef saw impressive gains Friday as choice rose $4.35 to $361.63 while select climbed $2.05 to $346.02. Nelson says cutouts were also higher for the week.
Can Cattle Futures Continue to Rally?
Cattle futures made new highs for the move but can the futures continue to move higher and fill the chart gap areas? Nelson says that may be in the cards. “We can probably fill the first gap directly ahead here for the fat cattle, roughly about $1.50 to $2 to $2.50 higher from here. For the feeders, we can suggest that we’ll probably fill this large gap we’re into right now, which still roughly about another six dollars on higher pricing.”
However, he’s not sure the market can retest the record highs from October. “I do think that the news flow from the prior weeks and months of higher imports could offset the decline in U.S. beef production set for 2026. So we can appreciate a little bit here. We cannot in our viewpoint get to those prior highs in the short term here.”
Lean Hogs Higher, Awaits Hogs and Pigs Report
Lean hog futures were also higher despite lower weekly closes. The market is getting spillover from higher cattle futures and higher cutouts, which were up $2.23 for the week. Nelson says the Lean Hog Index is also holding at $83.73, down just 15 cents coming into the session and indicates the cash market has likely bottomed.
The market is gearing up for USDA’s Quarterly Hogs and Pigs Report on Tuesday afternoon. The average trade guess for all hogs and pigs is 99%, with kept for breeding and market also around 99%. The key will be if the disease problems that are starting to flare up again are confirmed in the report.
Grains Higher on Short Covering
Grain markets were all higher Monday morning on short covering and technical buying. Soybeans were oversold after 27 cent losses last week and a correction of $1.20 off the highs Nov. 18. Flash sales also confirmed China was in for another 12.1 million bu. of soybeans for this marketing year and 2.4 million bu. for 2026-27. He says China has now purchased at least half of their commitments.
Nelson says corn and wheat futures were also getting some support from the delayed export sales report. It showed corn exports at 58.2 million bu. and total sales at 1.8 billion bu. up 30% from a year ago. Wheat exports were at 14 million bu. and now total 710 million bu. up 23% verses last year.
Geopolitical premium was only a slight factor in the rally in the grains as Russia attacked grain facilities in Ukraine ports again over the weekend, amid ongoing peace talks between the U.S., Ukraine and the EU.
