7/15/2025 Market Commentary

Live Cattle: The Live Cattle complex started the week under heavy pressure but turned around Tuesday and recovered most of those losses. Cash cattle last week were sharply higher. Averages for the week were $7-9 higher than the week prior as the packers were short cattle and needed to fill kill capacity. Boxed beef was higher this morning after a nearly $20 slide that began the middle of last week. Choice was quoted $1.46 higher at $378.53 and Select was $2.03 higher at $366.61. Boxed beef typically trades lower until after the Labor Day holiday and then begins to work higher on holiday demand. Lighter slaughter rates will continue to support boxed beef even if demand does begin to falter. On Friday the USDA increased their beef import forecast for 2025 to help make up for the decrease in U.S. production. This of course is going to hinge on the Brazilian tariffs that are set to go into affect August 1. If the 50% tariff does in fact go into affect, the U.S. will import zero beef from Brazil.

Feeder Cattle: The cash market has been the story within the Feeder Cattle Complex. The CME Feeder Cattle index was quoted lower through Friday’s sales after a new all-time high on Thursday. Monday’s sales brought the index back up to $321.10, just $2.27 below the record. The strong cash market has enticed the managed money to continue to buy Feeder Cattle futures. As of last Tuesday, the managed money sector was long 37,493 contracts which is an all-time record. Open interest within the Feeder Cattle complex also remains record large. There has been no news or update from the USDA concerning the Mexican border. The latest release simply states that “We must see additional progress combatting New World Screwworm in Veracruz and other nearby Mexican states in order to reopen livestock ports along the Southern border.”

Lean Hogs: Lean Hogs posted a new low for the move today before seeing a slight recovery. Most of the deferred contracts have seen nearly a $10 correction over the course of the last month as the futures follow the cutout and cash markets lower. Open interest has begun to decline and would indicate fund liquidation. The managed money was record long two weeks ago and has since decreased that position. Exports for 2025 are currently running close to 4% less than a year ago, while the USDA is forecasting pork exports to be down 2% compared to a year ago. Trade tensions with China and Mexico are definitely to blame, but the increased pork cost is also hurting pork exports.

Corn: Corn futures posted new contract lows Sunday night before finishing higher each of the first two days this week. Futures dropped below the $4 mark for the first time in nearly a year and spurred short covering. Fundamentally, there has been little change and Friday’s WASDE Report confirmed this. Weather continues to be the main focus on traders minds and the extended forecasts do not show any threat to the U.S. and the growing crop. Going forward the chances of a lower average yield are very slim and many are anticipating the U.S. average yield could be increased two bushel per acre over the course of the next few months.