Cattle futures ended mostly higher on Friday, with hogs and grains easing.
Cattle Futures Higher Friday, But Sideways
Live and feeder cattle futures ended higher Friday after a couple of days of profit taking. However, Joe Kooima with Kooima Kooima Varilek says the futures board has remained sideways since around Dec. 11. Live cattle futures corrected over $25 off the lows in November with feeder cattle recovering over $50 but have stalled out unable to get above resistance areas on the charts.
“We’ve had such a big rally here and we got to market extremely overbought and to have a correction just go sideways and take us out of that overbought status. That’s a really good indication of a strong bull market that we’re not quite dead yet. And we’ll have to take a look to see what next week really brings. But to have a market have such a strong rally like that and only give back just a little bit is it’s an extremely good position for the bulls,” he explains.
What Will it Take For Cattle Future to Break Out?
Market participants have been worn out with the volatility of the cattle futures and Kooima says the sideways pattern is unusual. However, its a result of the volume eroding. “We have smaller kind of daily ranges with lower volume. It’s just like, what what is going on here?”
Kooima says to get above these current resistance areas on the charts the market will need to see higher cash trade. Cash trade was quiet Christmas week and volume has been light the last two weeks. Cash trade by Wednesday was mostly $229 to $230 in the North, dressed prices were mostly #56 to $357. Southern business was light at $229.
“It was kind of some steady to a $1 better, kind of a good undertone to it. So call it a steady, marketplace,” he says.
Boxed Beef and Demand
Boxed beef values were a bit disappointing during the holiday season as they were not able to put in their normal seasonal rally. So does that mean consumer demand is slipping? Kooima says with the small volume of the boxed beef market that is actually negotiated it is hard to pinpoint the real market trend. “Yeah, we’d like to see the boxes catch here, a little bit to kind of bring some of these demand bulls back in the marketplace. But I don’t hear anything that indicates we’re slipping to much,” he says.
Beef Imports Capping Values
He says some of what is capping the beef values is increased imports from areas including Mexico, both fresh and frozen. “It’s bigger than what it was last year and that makes total sense when you look at the whole border situation, that being closed almost a year now.” Import volume will also pick up after the first of 2026 as the tariff rate quotas reset for Argentina and especially Brazil. “So I guess Trump is going to get his way a little bit as far as getting boxes to go down a little bit.”
Lean Hogs Down a Second Session
Lean hog futures were down for a second session still digesting the USDA’s Quarter Hogs and Pigs Report which did show some bearish categories compared to expectations. Kooima says, “The first hour of trade the morning after that report was released, was bearish,” he says.
However, the market recovered off the lows which to him was impressive. “It’s kind of more of a true testament of, okay, do we really believe some of those numbers or not? Or are we going back to what we’re all hearing from producers regarding how bad the disease is. It’s really hard to find anybody that’s got a good clean barn necessarily. So two years in a row now where we’re hearing some catastrophic death losses out there. And I think that’s that’s the main part of the reason why we have seen this rally and had it sustained so well is on the backbone of that disease issue.”
Rally in Hogs in 2026?
So could lean hogs be set up for a rally in 2026? Kooima thinks so. “I think if we look past like June, July and August, I think those markets could be a little bit more sustainable with their rally, just with all the disease issues going on.”
However, he thinks the market will need to get through a little uptick in production in the next few weeks. “We had a little snippet there where five or six weeks, our production was kicking really, really good, and that’s going to land here in the next well after we get into the new year next week in January and February,” he adds. After that he sees some holes in production.
However, there are some prices that present a hedge opportunity for producers. ‘This Feb April stuff, they’re great prices to have April close to $90, $89 or so. A guy’s gonna have to take a look at that into next week and see if there’s some floors you want to put on. Maybe something down at $85 level just for like a simple put option.”
Grains Ease Friday
After a Santa Claus rally on Wednesday the grain markets eased back a bit on Friday under light volume. Kooima says futures got up into some chart resistance. “For particularly for corn I think you look at that chart, it’s in a range and we just kind of went back to the top end of that range. I don’t know if we have enough news, especially on a Friday here the day after Christmas to really push that market up and through.” He also thinks there was a pick up in farmer selling as March corn got above December’s highs of $4.52.
Soybeans Correct Oversold Condition
Kooima says the rally in soybeans early in the week was the market correcting its oversold condition which had lasted for nearly two weeks. However, he’s hopeful soybeans have bottomed. “You know, at least you can start drawing some uptrends.” He says if the market participants come back and get some China news or the funds are done liquidating the market could see some recovery. The big key will be what happens with South American weather.
Grains Still Have Higher Weekly Closes
Despite the lower day Friday all of the grain markets had higher weekly closes. Can the market build on that? Kooima says, “I think if it does happen, it’s Monday. Tuesday when you’re going to want to see it happen. You’re going to have a little bit more volume Monday and Tuesday, and then kind of back to some of that holiday trade Wednesday. And then, you know, no trade on Thursday into Friday. So I guess I would like to see it more at the beginning of the week, just get herself a little bit further away from the lows, especially in the beans,” he says. At the same time he thinks not just corn but all of the grains could settle into a trading range until the January WASDE.
