5/6/2025 Market Commentary

Live Cattle: New contract highs were seen across the entire complex today before a quick selloff late in the day. Big increases in open interest have been the theme within the Live Cattle complex over the past few weeks and the last two days especially. Friday’s trade resulted in a nearly 8,400 contract increase and Monday saw a 7,500 rise. All of the price action and the relentless rise in prices that are taking place point directly to fund buying. As of last Tuesday, the managed money held a net long position of 129,000 contracts, which has increased from 106,000 a few short weeks ago. Their all-time record long was this March at 157,000 contracts. Choice boxed beef has lost its bullish tone and is now stuck in a sideways trend. Over the last week, choice is down over $2, but select has found support and is up nearly $9 over that same period. The choice/select spread is now at $10.59 after spending a lot of time over $20. There has been a little bit of cash trade in the South already this week, 218 from a major early on Monday and 220 from a northern regional on Tuesday.

Feeder Cattle: Feeder Cattle futures posted a new contract and all-time high today but could not break the psychological resistance level of 300.000. The CME feeder cattle index was quoted 2.98 lower on Friday’s sales and has taken a bit of the overly bullish sentiment out of the market for now. The index was up .38 to 293.78 for Monday’s sales. Cash feeders continue to bring record prices all across the country. Uncertainty surrounding the Mexican border and current screwworm situation give the managed money plenty of reason to continue to buy the feeder cattle complex and keep prices elevated.

Lean Hogs: June Lean Hogs traded below some key support areas today, posting a low of 97.05, before settling at 97.575. The 20-day MA of 97.33 will continue to offer technical support until a settlement below that line occurs. The deferred months posted small gains today and yesterday, and are near the contract highs set before the talks of tariffs took over the market. Cash ISO wean and feeder pig prices remaining $3 to $4 higher than a year ago indicating short supply of available feeder pigs. Tighter supplies along with disease issues within some operations are helping support the deferred months. The pork cutout remains stagnant as export demand remains a big question mark. Having no fresh positive trade news for pork exports leaves the possibility of large supplies for our domestic market.

Corn: Corn futures have lost 45 cents over the past month as there is no current threat to U.S. production for 2025. Planting progress now stands at 40% planted, well above a year ago and slightly higher than the 5-year average. There looks to be a widespread window over the next two weeks for the corn crop to get planted and focus will shift to weather models and precipitation forecasts. Corn futures are now closing in on our most recent lows set at the end of March. One positive thing that could come from all the fund liquidation that we are currently seeing is their position will be rather small and give them buying power in the event of adverse weather or an increase in U.S. corn demand. Crude Oil has not been the friend of the corn market either, WTI traded higher on Tuesday after a good recovery from the lows on Monday that pressed within $2 of the lows set at the beginning of April.