4/11/2025 Market Commentary

Live Cattle: Live cattle finished the final session of the week higher after an extremely volatile week. The cattle complex continues to trade step-for-step with the equity markets, and after Wednesday’s announcement of a 90-day delay in tariffs, futures skyrocketed. Cash trade this week was lower across all regions. 208 in the North was the best bid around, and many took advantage of the good basis and sold cattle. Texas sold cattle at 204 this week and as of now, Kansas has yet to establish trade with 206 bids from packers and feed yards asking for 208. It does sound like a few packers are starting to get a little inventory around them as they are now buying cattle that will be slaughtered in May. Average carcass weights were up five pounds this week, while slaughter was down 27,000 head from last week at 564,000 head. This was well below the hopes of a 585,000-595,000 kill this week. Next week’s kill number will not have high expectations as some plants will run partial kill on Friday and limited kill on Saturday. Boxed beef will finish the week $7.75 lower in both the choice and the select markets while the choice/select spread is basically unchanged.

Feeder Cattle: The CME feeder cattle index finally pulled back after remaining resilient in the face of lower futures markets. Cash feeders have softened some, especially the bigger cattle, but have not seen a deep correction like the futures over the last week. Live cattle and feeder cattle have both been trading in tandem with the S&P futures, but it is hard to find a more perfect correlation than a chart of the S&P and May feeder cattle futures. After spending the better part of March ignoring the equity markets, the cattle futures have been aligned almost identically, move-for-move. Open interest has decreased nearly 18,000 over the last 15 trading sessions which is over 20%. The volatility has scared some away from these markets, but also long fund liquidation and those positions are yet to be put back on.

Lean Hogs: Lean Hog futures finished higher each of the final three days of the week resulting in a good recovery from the new lows set on Wednesday. The USDA lowered their 2025 pork production forecast in response to the Hogs and Pigs Report two weeks ago. Even with this reduction of 350 million pounds, U.S. production is estimated 1% higher than 2024. With a 1% increase in production, a 2% estimated decrease in exports vs. 2024 due to the Chinese tariffs and a general slow down in the Asian markets, pressure may be put on the pork cutout. Cash has stalled and we continue to see the cash hog market trade in the $82-88 range staying within the 5-day averages. Yesterday’s cash weighted average came in at $85.67. April lean hogs expire on Monday and traders expect the lean hog index to continue to work lower the next few days.

Corn: Corn futures finished higher every day this week and extended the streak of higher closes to six days. The USDA released their monthly WASDE report on Thursday and made the long awaited changes to export demand: increasing exports by 100 million bushels and lowering feed usage by 25 million bushels. The bottom line is a 75 million bushel reduction of carryout, lowering that number to 1.465 billion bushels. Quite the change from last June when the carryout was predicted at 2.102 billion bushels, which is over a 30% reduction. Nearby corn has now rallied 45 cents off the lows set on March 31, just ahead of the Prospective Planting Report. The managed money had liquidated almost all of their long position and are now faced with a smaller than expected carryout and a summer weather market right around the corner. Larger acres in 2025 will keep some of the weather premium out of the market, but every year there are multiple times weather scares push the market higher into the end of June.