5/9/2025 Market Commentary

Live Cattle: Cash cattle traded at new all-time highs again this week, and sharply higher at that. Northern cash trade took place on Thursday from 225-228 and mostly 355 on a dressed basis. Cash in the South started on Monday morning at 218 and traded as high as 220 later in the week. There are a few packers that have some inventory around them and cattle that were bought this week will not be slaughtered for a few weeks. There are mixed feelings on that topic. The packers having inventory on hand will reduce the need to buy as many cattle over the next couple weeks, but the fact they are willing to pay an all-time high price for those cattle and keep inventory around at these prices seems to imply that there are not a lot of market-ready cattle throughout the countryside. Boxed beef was higher this week but feels like the $350 area is about as high as it can get pushed. The choice/select spread did narrow up again this week and is now just above $14. Fund buying continues to be the feature within the complex as all futures months are at a steep discount to the current cash market. Skepticism remains as to the longevity of this cash market but every week of steady or higher cash entices the funds to stay long or add to that position.

Feeder Cattle: Feeder Cattle futures traded over 300.000 for the first time ever this week and removed the psychological ceiling from the market. There were multiple times that the market traded back below that mark this week but August did settle above, and that will be a positive look for the charts. The CME Feeder Cattle Index is currently at 296.14. Just off its highs, but still at all-time record levels. Cash feeders are all but unbelievable as everyday new records are set in sale barns, and demand remains strong.

Lean Hogs: The nearby Lean Hog contracts finished the day slightly higher but still results in a lower week. June closed at 97.575 which is 1.775 lower on the week. Cash fundamentals remain strong as cash hogs trade 4-5 higher than the current Lean Hog Index. The weekly export report released on Thursday showed pork sales were at 24K tonnes,  Mexico accounted for 10K tonnes and China was virtually zero. This weekend President Trump and China will be holding meetings to discuss the tariffs that both countries have implemented. Hopefully, the pork market will see some positive news in these meetings to help the cutout break the flat cycle that we see weighing on the June futures.

Corn: The corn market traded to new lows for 2025 this week due to a lack of threatening weather to get the U.S. corn crop planted and limited bullish news to feed the market. Export sales for last week were the highest in the last three months and shows continued excellent export demand for U.S. corn. Currently the U.S. is 100 million bushels ahead of the pace needed to meet the USDA export goal for this marketing year. Crop conditions in South America continue to improve, especially the Argentine corn crop which is 42% good to excellent, the best in five years. Planting progress will make a big jump over the next week as farmers plant large estimated corn acres. Summer weather is looking warmer and drier, but at the current time, the managed money is not concerned and is not building a long position.