4/8/2025 Market Commentary

Live Cattle: Live cattle futures have continued to be volatile to begin the week. After opening sharply lower on Monday, futures rebounded and were as much as $1.200/cwt higher on false rumors that tariff deals were put on a 90-day hold. Once those rumors were confirmed to be untrue, the market settled back in sharply lower for the day. Tuesday brought a new day and the market opened sharply higher before falling lower and finishing mixed. The cattle complex is keeping a close eye on the equity markets and trading in tandem with the DOW and S&P. There were a few head in Iowa that traded on Tuesday to a Nebraska regional from 332-335. This is lower than a week ago as hedgers are now staring at a rather large basis for this time period. It will be interesting to see where the bulk of cash trade takes place this week as packers still have limited inventory but attempt to use the fall in futures to shake lose hedged cattle.

Feeder Cattle: The bull spreads are in full force in the feeder cattle complex as cash feeders refuse to break lower. Most barns are quoting cattle lower but on limited numbers, however, as a whole the CME feeder cattle index is holding steady. Monday’s sales averaged $290.53 and were up $.53 from Friday’s sales. Many barns are seeing light volume this week as many producers are cancelling consignments due to the futures market moving sharply lower to finish last week. Open interest has declined from its record numbers that we have seen over the last month, but not as quickly as one would suspect. It sure appears that there is fund liquidation taking place, especially in the most active May contract.

Lean Hogs: Lean hog futures failed to hold the early gains on Tuesday and finished mixed. Cash fundamentals have turned lower after a six week stretch of holding steady. The pork cutout has actually worked higher over the past week and is now near the highest levels that market has seen in nearly a month. February export data was released yesterday, and pork exports have decreased year over year. Total shipments in February equaled 565 million pounds which was down 5% from February 2024. Japan’s purchases have moved lower while Mexico has held steady. Through February, total pork exports are down 3% compared to a year ago.

Corn: Nearby futures have now finished higher three days in a row, pushing the market to some very key technical levels. Moving averages and chart resistance all come together around the 470 level in the May contract. Export sales of 240,000 metric tons of corn to Spain announced this morning offered support to the market. The USDA will release their monthly WASDE report on Thursday. Estimates are showing a small decrease in carryout compared to a month ago. All eyes will be on demand and what the USDA does to export demand. Currently, the U.S. is running roughly 175 million bushels ahead of the pace needed to reach the current export goal. With all of the tariff talks that are currently happening, the question is whether the USDA will increase export demand to better align with actual exports, or kick the can down the road another month and see how exports are affected by the tariffs.