12/26/2025 Market Commentary

Live Cattle: The nearby Live Cattle futures continue to trade on both side of 230.000 as the cash market fails to move higher. For the third week in a row, cash trade in the North was at 228 and for the second week in a row on very limited volume. The South traded cattle at 229 this week and all of the trade looks to be done. Boxed beef was mixed this week as the choice/select spread continues to narrow. For the week, choice was down $9.60 and finished at $351.29 while select was $2.29 higher at $345.25. The choice/select spread has narrowed to $6.04 and is at the tightest level since the beginning of May 2024. Choice is now nearly $65 off of its high set at the beginning of September and down to the lowest level since the middle of May. The packers have sped up the chains throughout the month of December and the last three weeks were nearly the best consecutive totals for the year. This week’s estimated slaughter total is 429,000 head which is just 4,000 head below the same week last year. The increased kill totals have put pressure on the boxed beef markets and in turn, pushed packer margins back into the red. The biggest question is whether the packers continue to push the kill in the beginning of 2026 or if they slow back down to the 530,000-560,000 head per week area that the industry saw from June through November.

Feeder Cattle: Feeder Cattle futures turned in a very quiet week this week as most months traded within the smallest range the market has seen in nearly eight months. Light trade volume along with limited sale barn activity kept the market grounded this week. Today, the CME Feeder Cattle index was quoted $5.08 lower at $349.32. There have been extremely limited amounts of data going into the index the last few days and that will remain the case through the middle of next week. The limited head counts make a smaller sample size and total number of head in the index, and that creates less data in the averages. Feeder Cattle futures traded back above the 100-day MA at the end of last week and spent the entire week above that line. After today’s lower index quote, the gap between the futures and the cash has narrowed to $3.15. The January futures will trade in tandem with what the index does as we start 2026.

Lean Hogs: Lean Hogs futures spent the entire day lower and tested downside support areas in the process. The Hogs and Pigs Report that was released earlier this week showed plenty of hog supplies for the foreseeable future, but the futures market fought off the somewhat bearish news rather well. Wednesday afternoon, the pork cutout was quoted $93.66 which was $3.03 lower. After pushing to new historical highs for the month of December and testing the $100 level, the pork cutout has lost $6.10 since last Friday and is back to its lowest level since November 25. Iowa/Southern Minnesota carcass data that was released on Wednesday showed lower average hog weights which has been a rare occurrence during 2025. This week’s Cold Storage Report showed smaller amounts of pork stocks with total pork down 5% compared to a year ago and the smallest total dating back to 2008 when this report began. Bellies were down 9% from a year ago and are at a nine year low for this time of year.

Corn: Corn futures turned in a relatively quiet day today and traded on both sides of steady. The nearby contracts traded to new highs for the month of December but settled the day lower. Today’s close in the three closest contracts will be the second highest close of the month behind Wednesday’s finish. Technically, these contracts have pushed above the 200-day MA and now that the highs from the beginning of December have been taken out, traders will be eyeing the highs from the middle of November that are roughly five cents above current prices. Basis levels across most of the Corn Belt have been steady to even a bit firmer over the past few weeks as farmer-selling has been slow. Farmer-selling should begin to pick up after the first of the year with the better cash prices and the start of a new year. There has been little if any weather threats to the South American crop which will help produce the big crop that is currently expected in both of the major countries. There have been some tensions rise between Russia and Ukraine and many are watching the situation closely to see if there will be any export implications that come from the conflict.