4/4/2025 Market Commentary

Live Cattle: The final two days of this week saw the cattle complex open gap lower. Yesterday’s gap did get filled but the market did not go back and fill the gap left on the charts this morning. Live cattle futures finished limit lower in many months today setting up expanded limits of $13.000/cwt for Monday. The futures market ignored the equity markets very well throughout the month of March but could not shed the negativity in the first week of April. This move we have seen the last two days is nothing fundamentally related to the cattle complex, but the managed money pushed this market to these levels and with the current uncertainty surrounding the U.S. and the “tariff war” that is currently taking place, the managed money is choosing to exit their record or near-record long positions. Cash this week will be called steady with a weaker tone. The North saw cash trade from 210 to 213 and the South at 208 to 210. Packers continue to need cattle and appear to be somewhat short bought which has held the cash mostly steady and improved the basis. Boxed beef was mixed this week with choice gaining $6.02, while select lost $2.01. The choice/select spread is currently at $21.06 and signaling that demand is strong heading into grilling season. Overall, the futures are immune to the solid fundamentals and cash news within the complex and are trading the equities and uncertainty that surround the ongoing tariffs.

Feeder Cattle: With uncertainty in the equity markets and managed money that were record long, the feeder cattle complex has created a negative result for feeder cattle futures. All months except the April contract finished the day limit lower and create expanded limits of $16.500/cwt on Monday. Cash feeders remain very high and the CME feeder cattle index was actually quoted $.02 higher for Thursday’s sales. The index typically lags the futures action and the index should trend lower next week, but for now the cash feeders have not declined like the futures. The move the last two days has left a very ugly chart picture and leaves limited areas of support ahead.

Lean Hogs: In response to President Trump’s tariffs, China issued a retaliatory tariff on all U.S. goods early this morning, which lead the lean hog futures down the $4 limit through the summer months. April was unscathed by this news as the index and cash fundamentals have remained steady. In the last commentary we talked about the abnormally narrow April/June spread- that spread is now trading just over $4, narrowing up significantly from the beginning of the week. With the retaliatory tariffs China has put in place, pork being sent into China from the U.S. will be subject to the 34% tariff. Weekly export sales that were released Thursday morning showed 53K tonnes of pork, posting a new marketing year high. Mexico accounted for 31K tonnes while China was 10K tonnes.

Corn: May corn was the bright spot for the commodity complex this week, finishing higher on Friday. If any market is somewhat immune to Chinese tariffs, it would be the corn market. Soybeans may create a drag and limit a move higher in the corn futures as China is a major customer for the U.S. and our soybeans. Export sales this week were solid once again and puts us 122 million bushels ahead of pace to meet the USDA goal. Next week, the USDA will begin releasing their weekly crop conditions report again for the 2025 growing season. The corn belt is nearing the beginning of planting season and, for the most part, has caught decent rains to add some moisture to the soil profile.