9/26/2025 Market Commentary

Live Cattle: Live Cattle futures finished the day mixed as the nearby October finished lower, while the deferred contracts finished over a dollar higher. The lower cash trade has kept the front months under pressure throughout the week while traders continue to look at tighter supplies during 2026. Cash this week was lower across all regions as packers have a good amount of inventory around them. The North traded mostly at 232 on Thursday and the South traded at 237. The exceptional, record basis that has been realized up to this point of 2025 is now gone and the northern cattle feeders are now trading cattle at more historical basis levels for the month of September. Boxed beef was also lower this week. Choice was quoted at $372.47 this morning which is $0.50 higher on the day, but $10.54 lower than last Friday. Select is at $353.20, down $0.25 today and $5.89 on the week. Average carcass weights were unchanged this week compared to a week ago, but are now 15 pounds heavier than a year ago. Carcass weights will work higher into the end of the year as the fall weather will help make bigger cattle. The lower cash market and deteriorating basis is also backing up a few cattle as the feedlots hold onto cattle longer and hope for a recovery.

Feeder Cattle: From the highs set on Monday, Feeder Cattle futures lost over $13.00 throughout the course of this week but did finish the week sharply higher. With news stories coming in and reports being changed, volatility has been high. At the beginning of the week, the USDA announced they were working on some sort of incentive plan for the cow-calf sector to begin retaining heifers and increase cattle numbers. Many interpreted this news as the USDA would somehow pay ranchers to retain heifers. On Thursday, the USDA released details that there would be no monetary incentive. In the statements from Secretary Brooke Rollins, she explained that they have seen how the government getting involved can completely distort the markets and that there is currently no plan under consideration for payments into the beef cattle industry. Instead, the plans will focus on opening up more land and expanding risk management tools. This sent the futures market lower as traders had priced in even tighter supplies of cattle due to the expectation of accelerated heifer retention.

Lean Hogs: Yesterday’s Hog and Pigs Report resulted in a big surprise as the USDA released a hefty decline in hog numbers. The breeding herd is 98.2% of a year ago, market hogs are down 1.3% and June-August farrowings were 96.6% of a year ago. All of these numbers were well below the pre-report estimates, as well as what the USDA’s monthly WASDE reports have been showing for pork production. The sow herd is now at a 10-year low with farrowing intentions for September through November at 97.6% and December through February at 99.8%. Combine the bullish quarterly report with the pork cutout being up $3.59 on the morning report, the Lean Hog complex once again set new contract highs across all contract months except August 2026. Cash hogs continue to remain strong as the Lean Hog index continues to stay in the $105 range.

Corn: Corn futures finished the week lower as the market continues to search for news to give the market direction. Export inspections this week were very good once again and Mexico was the top destination. Tuesday, the USDA will release their Quarterly Stocks Report and give the industry a look at how much corn will be carried into the new marketing year. The average trade estimates are showing a slight increase in carryout compared to the last report. The past two years, the USDA has gone back and revised the previous year’s production higher and added more supply to the carryout. Today’s CFTC report showed the managed money as sellers of 14,624 contracts, increasing their net short position to 94,675 contracts. Technically, Corn futures tested downside support all week and finished the week below the 20-day MA. This is the first time the December contract has closed below the 20-day MA since August 20. There is pretty good chart support around 415 if the market works lower to start next week.