1/28/2025 Market Commentary

Live Cattle: Live cattle futures spent Monday with two-sided trade and a mixed finish following Friday’s Cattle on Feed report. Placements in December were 3% lower than the year prior and nearly 2% less than the low end of the estimated range. A sharply higher start to the day gave way to lower markets before settling slightly higher. Tuesday was a new day and cattle quickly found themselves over $2 higher and never let up. Feedlots are asking higher money to start the week with most somewhat weary to underprice inventory on the show list. Cash in the South will be key as to whether the February board is too high or still too cheap. Early chatter sounds like asking prices are $212 right now. Managed money is nearing record length in Live Cattle complex as of last Tuesday, and are most likely holding a record position now. They are willing to defend that position for the time being while adding to it in hopes that it catches up to the red hot cash market. Until there is an outside influence that affects the Live Cattle market or any of the cash fundamentals slow down, the futures market is content trading higher, and in a big way. February futures have now added $16.950/cwt in 2025. Cattle Inventory Report will be out this Friday at 2pm. Limited estimates around, but the all-cattle estimate is 99.1% of a year ago, calf crop 98.5%, and beef replacements at 101.3%.

Feeder Cattle: The January contract expires at noon on Thursday with an index that has begun to climb again. Index released today for Monday’s sales is 1.27 higher at 279.20. Cash feeders seemed to have plateaued for a minute but with corn settling down and Live Cattle futures setting new contract highs everyday, the cash feeders are working higher. Funds are holding a record long position, and currently have no reason to ease up. The deferred months have come along for the higher trade this week. The Mexican border opening for feeder cattle imports continues to get pushed back, giving the deferred contracts some life as tighter supplies may be here for longer than originally expected.

Lean Hogs: Futures found technical support late last week after climbing back above the 20-day moving average. The buying has carried into this week and the summer months posted new contract highs on Tuesday. Cash fundamentals have also been supportive with the cutout, index, and cash all working higher. Light kill last week is being attributed to weather problems in the east. Cold storage report that was released Friday confirmed that pork in storage is near the all-time record low. Managed money had been liquidating a portion of their long position and may have been taken a bit by surprise and are now adding to their long position.

Corn: The corn market found some support Tuesday after a 2-day slide, blame it on “turn-around-Tuesday” or maybe the quick pull back in the market was a enough for the time being. Either way, corn finished the day 2-4 cents higher. Flash sale announcements of corn exports to start both days this week aren’t hurting either. Late last week Argentina announced lessening export taxes on agricultural goods, corn included. March corn traded down nearly 17 cents off its high that was posted Thursday due, in part, to that news. Cash basis continues to erode as farmer-selling has been rapid with the latest rally. End users appear to have their needs covered for a few months here and are backing off bids for immediate delivery. Futures’ spreads are taking note and trading weaker.