3/21/2025 Market Commentary

Live Cattle: What a difference a couple hours makes in the cattle complex. April futures traded as much as 2.200 higher this morning before trading as much as 1.800 lower. Cash cattle traded sharply higher today, anywhere from 212-215 live in the North, and the futures initially reacted positively to the news before the large sell-off. All months except April posted an outside day lower. It will be interesting to see how we start next week and whether the technical or the fundamentals win out. It appears today’s lower move had more to do with position squaring ahead of the Cattle on Feed Report that came out at 2 p.m., as well as the end of the month and quarter quickly approaching. The report showed cattle on feed down 2%, which was right on the expectation, with placements down 18% and marketing down 9%. The report looks mildly bullish at first glance. Kill this week was the lowest we have seen in some time at 560,000 hd. Wednesday’s weather did not help in the total but overall, packers are not pushing the chain to full capacity. Boxed beef and the choice/select spread both showed signs of life this week and that demand, at least from the retail sector, is picking up. Overall, a great week fundamentally for the cattle complex, but a poor close from a technical perspective.

Feeder Cattle: Feeder cattle futures continue to surge higher, setting new contract and all-time highs on Friday before finishing sharply lower. Open interest in the feeder cattle complex is at a record high, and the funds are currently holding a record-long position. The CME feeder cattle index is also at a record high as cash feeders continue to push higher. Placements for February were down 18% compared to a year ago. With the weather we saw in 2024, a lot of January placements were pushed to February, and now with the decrease of Mexican feeder cattle imports, there were significantly less cattle placed in February than the year prior.

Lean Hogs: Lean hog futures continue to chop around as news of tariffs and exports change daily. Pork sales were poor and Mexico only purchased 5,000 tonnes according to this week’s Exports Sales Report. Cash fundamentals domestically were steady to slightly softer this week. The pork cutout has seen limited movement over the past few weeks while the cash has moved slightly lower. Slaughter weights continue to climb. Iowa and Southern Minnesota weights for the week ending March 15 showed weights up .2 lbs from the previous week and 1.70 lbs above a year ago.

Corn: The grain markets continue to wait for March 31 and what the Prospective Planting Report tells the industry. More and more private estimates are coming out that 94 million acres may be the low end of the crop this year. If there is good weather this spring and farmers can get in the fields early with good conditions there may be even more acres switched to corn. Exports for corn were good this week—the best in the last five weeks and above the ten-week average. Wheat and bean exports were pretty disappointing, keeping a lid on the entire grain complex.