7/3/2025 Market Commentary

Live Cattle: Live Cattle futures finished higher each of the final two days of the week. The cash markets preformed better than initial expectations and much better than the bids that were offered earlier in the week. Cash in the North traded mostly from 230-232 but a major packer was bidding 233 late in the day on Thursday. The South traded cattle at 224 on Wednesday and then 225 on Thursday morning. It would appear that packers plan to ramp up the kill next week, and do not have the inventory around them to do it. Boxed beef was lower this morning with choice $4.09 lower to $390.77 and select down $1.32 to $378.99. Both remain at very high levels historically, but choice is over $4 lower on the week. Slaughter data was released this morning for the week ending June 21. Average steer and heifer weights were 6 pounds heavier than the week prior and are now 25 pounds larger than the same week last year. President Trump is set to speak this evening and many are expecting some sort of positive news on trade talks with China. The comments tonight will ultimately have little affect on the beef complex, but China has yet to re-list U.S. packing plants for export licenses. There will be no specific talk of that tonight, but positive talks would be a step in the right direction for those licenses to be reinstated.

Feeder Cattle: This week brought extreme volatility to the Feeder Cattle complex. The announcement of the gradual reopening of the Mexican border earlier this week sent the markets sharply lower, but the last two days the futures saw a strong recovery as the cash fundamentals remain higher than the board. The CME Feeder Cattle index is at $314.10, just $3 off its high of $317.10 that was set two weeks ago. The Corn market has found a little support this week, but the big basis seen on fat cattle sales and the limited inventory of available Feeder Cattle has outweighed the higher feed costs so far. Open interest within the Feeder Cattle complex remains record large. Next week will begin the Goldman Roll from the August contract. With the funds near record long and and the futures at a discount to cash, next week could be very interesting, especially for the futures spreads. Open interest in the August contract has dropped roughly 20% this week ahead of the Goldman Roll, lessening the severity of possible market moves next week.

Lean Hogs: The pork cutout continued its downward trend this week, losing $13 since the high set on June 23. The sharp drop in cutout prices has turned the nearby futures lower with July losing $5 and August losing $4 during the holiday-shortened trading week. The glimmer of good news is cash hogs actually traded higher this week and are now trading above the current cutout price. Seasonally, we see a smaller number of market ready hogs and lower weights due to summer heat. It appears that the packers will continue to remain aggressive in filling their empty shackles. President Trump’s comments tonight will affect the pork markets more than the beef markets as China is a large buyer of U.S. pork.

Corn: The Corn market gained 25 cents from yesterday’s low to today’s high but could not hold all of those gains heading into the weekend. Yesterday, a trade agreement with Vietnam was announced and the corn market found support on that news. With many holding out hope that President Trump will announce some sort of progress with China tonight, the result was short covering by the managed money the last two days. The funds have been heavy sellers of the Corn market for a couple of months as there has been no news to ignite the Corn market. Traders will have three days to digest tonight’s announcement and continue watching weather forecasts before Sunday night’s opening of the grain markets. Seasonally, the 4th of July holiday is bearish to grain markets. This year will be no different if the news tonight is less than satisfying, and traders turn back to weather alone.