5/13/2025 Market Commentary

Live Cattle: After last week’s new record cash prices, the U.S. government shut off cattle imports from Mexico over the weekend due to screwworm. This is more of a feeder cattle story but will definitely have an impact on supplies of fat cattle 5-6 months down the road. Futures were sharply higher on Monday and the deferred contracts followed that with a higher day on Tuesday. Cash this week is somewhat of a question mark at this point, feedlots will be asking for higher money, while packers seem to have some inventory to chew through. A few of the packers in the North have a 2-3 week supply of cattle bought and Monday’s kill of just 99,000 head will not deplete that inventory quickly. There have been rumors today that at least one major packer in the North will be going to one shift instead of two and are moving scheduled cattle back a week. Boxed beef was mixed this morning with choice up $1.43 to $349.57 and select down $1.35 to $333.88. The smaller kills that have been taking place the last 4 weeks are helping support the meat market but the $350 area has been hard to press through.

Feeder Cattle: The Mexican border is closed to all imports of feeder cattle again. In an announcement over the weekend from the Department of Agriculture, the movement of cattle, horses, and bison will be restricted due to screwworm until further notice and will be evaluated on a monthly basis. Imports of Mexican feeder cattle had recently grown to about 2/3 of the normal amount before the initial closure in November. Feeder cattle futures surged higher on Monday as traders tried to price in the effects the lack of cattle will have on the market. The CME feeder cattle index will continue to work higher as feedlots compete for the same amount of cattle, with less supply to choose from. The index was quoted at 302.40 for Monday’s sales which is up 1.37.

Lean Hogs: Lean Hog futures appreciated the better talks between the U.S. and China over the weekend and have finish higher each of the past two days. The nearby contracts are still struggling to shrug off a weak cutout market, while the deferred contracts are trying to price in a lower supply of hogs in coming months. Tuesday’s WASDE report saw a decrease of 79 million lbs of production for 2024. Exports were raised 103 million pounds based on better than expected trade in the month of March. Of course, this comes with a few questions as the U.S. finds itself in some sort of trade war with the two biggest buyers of U.S. pork: Mexico and China. The charts look friendly for the hog market and the managed money does have some room to add length to their position.

Corn: It is hard to find a poorer performing commodity than corn right now. Yesterday’s WASDE report showed a 50 million bushel reduction to the old crop corn carryout putting the current carryout at 1.415 billion bushels, which is the tightest the market has seen in three years. Old crop corn futures failed to trade according to the good news in yesterday’s report. Turning to the new crop balance sheet, the USDA plugged in the 95.3 million acres from the Prospective Planting Report and a 181.00 average yield, no shock with either of these numbers. New crop demand is where the surprises were. Feed demand is projected at 5.9 billion bushels which is 150 million more than the current year and export demand is up 75 million bushels compared to this year. Obviously, there is a long time until the end of the 2025/2026 marketing year, but the USDA is projecting extremely good corn demand going forward. This comes as somewhat of a surprise with the current “trade wars” the U.S. is involved in, but the old saying “cheap prices cure cheap prices” might be just what the market needs here. Futures action has been poor and feels worse after yesterday’s report. With the funds holding less than a 14,000 contract net long and the U.S. growing season right in front of us, the corn market should find ample support here fundamentally and on a technical basis.