4/1/2025 Market Commentary

Live Cattle: Boxed beef opened the day higher and gave the futures market the news it needed to push higher, as well. Choice was quoted $7.60 higher at $342.86, select was $2.20 higher at $322.21. Futures went from steady mixed to sharply higher shortly after the morning boxed beef report and never looked back. Today also starts a new month and new quarter, and as many in the industry say, new money. Cash cattle this week is still a question mark as packers and feedlots have both been quiet the first two days of the week. There has been some talk this week about how disappointing the cash market was last week. It’s difficult to be too disappointed in an unevenly steady market at all-time highs. Weighted averages in the North were on either side of $213, while the South was above $209. With the futures higher and box beef finding continued support, feedlots will be thinking no worse than steady. Many packers are advertising cooler clean outs and plant maintenance, insinuating they won’t need to buy as many cattle this week. Slaughter for Monday was estimated at 104k head, down 15k from last week. The 609k head slaughter last week was a pleasant surprise but it’s unlikely to be the normal going forward.

Feeder Cattle: The CME feeder cattle index posted a new all-time high on Monday, coming in at $291.50, which was $4.74 higher on the day. The head volume for Friday’s sales were light and it was mainly South Dakota barns that went into the data. There are many things we can point at to make this number feel skewed but the bottom line is demand for feeder cattle is high and supply is limited. Sale barns continue to set all-time records across all classes of cattle and each week those same records are broken. Futures opened the day steady to lower before finding support and pushing $2-3 higher. The funds are currently record long and open interest remains at record levels. Until there is news to scare the managed money away from this market, they will be in control and defend their long position.

Lean Hogs: For the third time this year we are nearing judgement day for President Trump’s proposed tariffs with Canada and Mexico. The hog market has spent the better part of 90 days trading the cash fundamentals, but considering the looming tariffs. Cash fundamentals continue to trade sideways to lower. Last week’s kill was a step up from previous week’s at 58k head larger than the prior week and 86k head higher than the same week a year ago. The futures market continues to see very large daily ranges and a lot of volatility day in and day out. April futures will expire on April 14th and are currently within 50 cents of the CME lean hog index and the carry to June is not as sizable as normal. This could partially be attributed to the uncertainty surrounding the tariff talks. After today’s trade the April/June spread is still under $10. Typically that spread is near $15 this time of year.

Corn: The Prospective Planting report is now behind us and the baseline for acres is set for the 2025 growing season. Corn acres reported as of March 1 are at 95.326 million acres, which was about one million acres above the average trade guess. It appears the market priced in that some private analysts speculated between 95 and 96 million acres. Corn futures are now 20 cents off of their lows that came right after the report was released. It is interesting to see where the 5% increase in corn acres are coming from, and the answer is cotton country. Most of the corn belt states saw a mild increase which most knew would be coming, however there are many southern and delta states that are looking at an increase between 10% and 40% compared to a year ago. Definitely something to keep in mind as the market tries to project the average corn yield for 2025. The USDA weekly export inspections yesterday morning showed another good week of corn shipments. The U.S. is now 230 million bushels ahead of the pace needed to reach the current export goal- something to keep an eye on in future WASDE reports.