2/3/2026 Market Commentary

Live Cattle: Live Cattle futures recovered all of Friday’s losses to start the week and then added an additional $2 today. The futures market pushed to new highs for the move today and is now at the highest level since October 23. Friday’s Cattle Inventory Report was mildly friendly and confirmed tight numbers of cattle moving forward and that has lead to fund buying so far this week. Expectations for the cash market are higher this week after last week’s sharply higher market. The weighted average in Nebraska was 239.89 last week, while Kansas’ average was 239.38. Trade in the North ranged from 238-241 and the South traded at mostly 240 with some 241 later in the day on Friday. Boxed beef was higher this morning and pushed choice back above $370.00 for the first time since November 25. Choice was quoted at $370.87, up $2.66 while select was $2.85 higher at $367.76. Open interest within the Live Cattle complex continues to increase and is currently at 336,000 contracts. This is the highest level since November 10 and would back up the CFTC reports that the managed money is buying the Live Cattle futures. Last Friday’s CFTC report showed the funds as buyer of 4,208 contracts for the week ending January 27. The all-time record long position held by the funds came a year ago and was 156,909.

Feeder Cattle: Feeder Cattle futures traded on both sides of steady this morning before pushing near yesterday’s highs later in the day. Friday’s sharply lower move felt like it had more to do with outside markets and end of the month positioning, and after Friday’s friendly Cattle Inventory Report, the buyers came back to the market. The CME Feeder Cattle index continues its move higher and is currently at $375.01, up $10.28 compared to a week ago. The increased Live Cattle futures along with the Corn market failing to find sustained support has increased the price that feedlots are willing to pay for Feeder Cattle. Open interest has also increased in the Feeder Cattle complex which is nearing 80,000 contracts and has had a more impressive recovery than the Live Cattle. Today, the deferred contracts saw more gains than the nearby contracts as they continued to be discounted to the current market. It looks like many traders are starting to wonder if the Mexican border will every be reopened and are now buying the lower deferred contracts.

Lean Hogs: Lean Hog futures pushed to new contract highs in every month but the nearby February again today as fund buying continues to push the market higher. Continued worries about disease pressure and what that means for supplies of market-ready hogs has enticed the managed money to buy the complex and add large premiums to the summer months. Last Friday’s CFTC report showed the managed money as buyers of over 16,000 contracts bringing their net long position to 113,806 contracts. Along with the worry of disease, pork demand has remained strong both domestically and through export. The high price of beef has helped pork demand as consumers look for a cheaper source of protein. Exports remain strong and Mexico has been the featured buyer as of late, accounting for half of the weekly total last week. The front month high for 2025 was 113.700 and is now an area to watch for resistance in the coming weeks.

Corn: Corn futures finished the day higher for the first time since last Thursday, but ran into overhead resistance near today’s highs. The 20-day MA is currently at 429 1/2 in the March contract, and will serve as resistance for the next few days. Weekly export inspections were released yesterday and showed a decrease in corn shipments for the week ending January 29, at nearly 18% less than the 10-week average. Even with the poor week, the U.S. is on pace to beat the USDA export goal by 350 million bushels. Corn demand continues to be strong across all categories. The current export goal, if met, would be a record. Ethanol production has been at record levels, and feed demand is expected to be record large this year. The worry of the market is the abundance of bushels that the U.S. currently has and what production could be for 2026. The USDA will release their Prospective Plantings Report at the end of March and give a glimpse as to how many corn acres the U.S. is intending to plant. For the next 60 days, traders will be watching South American weather and what that means for their production, along with any significant changes to U.S. demand.