2/21/2025 Market Commentary

Live Cattle: Cash trade struggled to find strength as packers have reduced kill over the last couple weeks and boxed beef continues to drift lower. Cash traded in the North mainly at $200 live and $315 dressed, with a few cattle getting sold at $201 to regional packers. April futures finished the week $.30 lower after bouncing off some chart supports levels twice this week. Dressed weights for the week ending February 8 were unchanged from the prior week but up 46 lbs from last year. This number is skewed slightly with the U.S. enduring a cold snap during the same week a year ago. We should see weights have some short-term relief with the cold weather that moved into the Midwest this week, but overall we will continue to see large carcasses due to an ideal winter and packers slowing their chain speed causing feedlots to keep cattle on feed longer. USDA Cattle on Feed report that was released at 2pm today showed cattle on feed at 99% of a year ago, placements up 2% from last year, and cattle marketed for the month of January up 1%. All numbers were pretty close to the average estimates and should not affect the market much Monday morning.

Feeder Cattle: Despite live cattle futures that are trading sideways to lower and the corn market that continues to put in new highs, feeder cattle futures have been well supported. The April contract finished $1.60 higher for the week. The CME feeder cattle index saw gains this week as well, which is helping to support the futures. Feeders have traded themselves into a very interesting chart formation. The 20-day MA has been offering resistance above the market since the beginning of February and the 50-day MA has held the bottom side for the same duration. A breakout one way or the other is imminent, but the range is narrowing and next week will be telling for the next big move in the feeder cattle futures.

Lean Hogs: Cash fundamentals surrounding the hog market turned on a dime this week and drug the futures lower with them. The pork cutout gained over $8 over the course of two weeks and in the last 3 days has wiped out all of those gains. Managed money has not liked the bearish fundamentals and have been exiting their long positions. Open interest in the lean hog complex dropped close to 15,000 contracts on Thursday indicating there is long liquidation taking place. April futures breached the 100-day moving average today after setting new contract highs just last week. Demand is remaining strong. Export sales out this morning showed continued demand from Mexico.

Corn: Corn futures posted new highs for the move in the middle of the week but gave up all of the weekly gains on Friday. May corn reached its highest level since January of 2024 but failed to find much support at those levels. Demand remains strong across ethanol and exports, currently sitting 8% ahead of the pace needed to meet USDA’s yearly export goal. Look for revisions higher in the March WASDE report. We are 40 days away from our first look into the 2025 growing season and the acres for principle crops. The consensus is that we will see a HUGE corn acre number on March 31st, which will offer some resistance to rallies through the spring and into the start of summer.