12/2/2025 Market Commentary

Live Cattle: Live Cattle futures have rallied nearly 20.000 from their lows set last Monday and are now back above technical resistance levels. Boxed beef continues to be supported, and  a better cash market late last week has enticed traders to buy the complex following the news of the Tyson plant closure just ten days ago. Last week’s cash averages are now well below the nearby December contract and will definitely cause the feedlots to ask for sharply higher money this week. Last week’s weighted averages showed Kansas selling cattle $10.55 higher than Nebraska. Some of this is the difference in time that the trade took place as the North traded early in the week when the futures were near their lows, while the South waited until Friday but the main reason is the lack of market ready cattle in the southern states. With the Mexican border being closed, cattle on feed in Texas and Kansas are down over 16% from a year ago, or 830,000 head. Currently, Iowa and Nebraska have 3% more cattle on feed than a year ago. Boxed beef started the week higher but was lower this morning with choice being quoted $2.69 lower at $366.20 and select down $4.74 at $353.14. The choice/select spread posted a new low yesterday at $11.01 but did recover slightly this morning. A year ago, the choice/select spread was $36.01. Typically, a narrow spread indicates a lack of demand, but this year it has more to do with the increase in supply of choice meat. With cattle staying on feed longer, 85% of cattle slaughtered are grading choice or better which is a 2.5% increase from a year ago.

Feeder Cattle: Feeder Cattle futures traded limit higher early in the day but could not stay locked up the limit all day. Buying has continued following Secretary Rollins comments stating that the U.S. is not ready to open the Mexican border, and when the border is opened it will likely be just one port. The CME Feeder Cattle index fell to $318.76 late last week after very light volume due to the Thanksgiving holiday. Today, the index was up $12.66 to $332.36 following Monday’s sales. Cash Feeder Cattle continue to sell well across all regions of the country as feedlots continue to fill their pens with record tight Feeder Cattle supplies. Technically, the futures have traded back above the 20-day MA which has removed overhead resistance and opened up some top-side chart objectives. Open interest continues to decrease and is now down to 63,836 contracts, setting a new low for 2025 as many traders are choosing to sit on the sidelines, something that could last into the end of the year.

Lean Hogs: Lean Hogs saw small losses across the complex today with the exception of the nearby December contract which closed 0.275 higher at 80.500. The Lean Hog index is currently quoted at $81.67, which is only a $1.17 premium to the December futures contract. This morning’s pork cutout report showed 209 loads traded at an average of $95.01. The pork cutout appears to have found support in the $94-95 area this week after trading down to $90 just ten days ago. National cash hogs were $1.62 lower at $70.06 this morning, which is a new low. Spain continues to be in the headlines surrounding the ASF cases within the country. Over the weekend, the country announced another dozen suspected cases of ASF which has resulted in the loss of nearly a third of their export certificates. At this time, China has blocked just one of Spain’s regions, but it is the largest region for pork production.

Corn: Corn futures traded back above the 200-day MA today for just the third time since June on news surrounding Russia and Ukraine. Putin threatened to cut off Ukraine’s access to the Black Sea after drone attacks from Ukraine against some of Russia’s fleet. Corn futures finished last week above the 20-day MA creating a better technical picture heading into this week. After a lower start yesterday and through the overnight session last night, the futures rallied 10 cents from their lows today, but could not hold all of those gains and most months finished back below the 200-day MA. Export inspections that were released yesterday were lower than the past few weeks, but still showed good export demand. Japan, Mexico and Columbia were the top destinations for the week. Mexico remains the United States’ top customer for Corn by a big margin. Brazil continues to make progress getting their Corn crop planted and are currently 7% behind the pace from last year. Early estimates for corn production in Brazil are for a 3-4% decrease from last year.