2/28/2025 Market Commentary

Live Cattle: The live cattle complex finished the week with big losses across all months, with the nearby contracts leading the way. April futures broke through support areas and lows from last week and pushed lower to finish the day. Cash trade has become a sore subject with feed yards as packers continue to slow the chain speed and manage the inventory of ready cattle. A regional packer in the north is now running 3-day weeks and only killing contract cattle until margins move back into their favor. Carcass weights for the week ending February 15 were up two pounds from the previous week and 41 pounds higher than a year ago. Boxed beef will finish this week all but unchanged. Total cattle slaughter is on the third straight week of small kill numbers. Last week’s kill was revised up 6000 head but still a very small week historically. Total slaughter this week is 566,000 head. Beef demand seasonally picks up in this time slot, and boxes and the choice/select spread seasonally work higher. Economic and political uncertainty is also weighing on live cattle futures. With tariffs set to go into place with Mexico and Canada on March 4, the beef and cattle markets are far from immune to inventory and demand challenges going forward. The DOW is nearly 2000 points off this year’s high set on January 31st.

Feeder Cattle: Feeder cattle futures are the bright spot among the commodity markets this week. After breaking out of a range on Monday morning, futures found buyers that propelled all months higher, testing contract highs in many of the deferred months. Feeder cattle finished the week under pressure, unable to fight off the lower live cattle futures. The combination of high demand, strong prices and the index at a strong premium elevated nearby contracts. Today’s index is at $281.06, which is just $0.62 below the all-time high. The March contract finished higher four of five days this week and finished the week with a gain of $7.025/cwt.

Lean Hogs: Tariffs are the name of the game in the lean hog complex. Back and forth as to when and if the tariffs would go into effect created a volatile week within the futures. President Trump says the tariffs with Canada and Mexico will be going into effect on Tuesday, March 4, with plans to add tariffs to China as well. April futures finished below the 200-day MA for the first time since mid-September. April should stay tied to the cash fundamentals to some extent but not a good technical look for the hogs. The pork cutout was quoted $4.30 higher yesterday afternoon, raising it back above the $100 mark. Almost all of the higher price came in the belly primal which had very light volume.

Corn: May corn finished .3550 lower on the week following AgForum’s outlook conference and the projection for 94 million acres of corn to get planted this spring, up 3.4 million from 2024. The economic difference between corn and soybeans is large and even with the pullback in futures this week, corn is still the more attractive crop. Export sales this week were 50% of the four-week average. The USDA is currently underestimating our exports compared to the pace we are on, but with more weeks like this, we will not be far off the expectations. Tariffs also affect the grain markets, as Mexico is a big corn customer and China buys a large amount of U.S. soybeans.