5/16/2025 Market Commentary

Live Cattle: After posting new contract highs across the entire complex on Wednesday morning, and the June contract posting an all-time high futures price, Live Cattle turned sharply lower and erased 9.000/cwt in two days. There is no glaring news that led to the collapse but felt much more like money flow and fund liquidation. The lack of fresh news to the market may have also contributed. After the USDA announced over the weekend that it would be closing the the Mexican border for cattle import, the market was asking “How much more good news is out there?” and wondering if that news could drive the market even higher. The cash market failed to trade in the same fashion as the futures, and will be called steady to even a buck higher. The bulk of the trade in the North took place at 227-229 and the South traded at 218-220. Boxed beef was higher again this week. Choice will finish the week nearly $6.50 higher, while select is up over $10.50. Kill cuts have played a large part in the higher meat trade but demand continues to out perform most expectations. Slaughter numbers will continue to be light for the next few weeks with the Memorial Day holiday. Live Cattle finished this week down 2.450 after finding new highs earlier in the week and then trading lower than last week’s lows. Technically, not a great picture but there was slight recovery today to finish off the lows for the week.

Feeder Cattle: Feeder Cattle also reversed directions in the middle of the week but just like Live Cattle, the cash has not followed suit. Feeders in sale barns have cheapened up slightly but that has not filtered into the CME feeder cattle index in a big way yet. The index for yesterday’s sales was quoted at 300.79 which was down 1.38. With fat cattle returning huge margins to the feedlots, it sure feels like there is a little bit of extra money in the bids for feeders to fill the pens back up. Going forward, all eyes will be on the Mexican border and what the month by month updates are on reopening. It is worth noting that corn seasonally works higher over the next 45 days and with the lack of buying in that market, the current fund position and summer weather, corn is ripe for a rally which could keep a little bit of a top on the feeder cattle markets.

Lean Hogs: The higher cutout market sparked Lean Hog futures to trade higher to finish the week. Lighter kills and continued good demand are both supporting the pork cutout and in turn, helping the cash markets. Exports last week were again good for pork but China was absent from any purchases. Technically, hogs are up against some resistance levels that are keeping most contracts from trading a whole lot higher. Iowa/Southern Minnesota weights continue to drop and are playing into lighter weekly production as well. Domestic demand for pork has been strong and actually increasing in recent weeks. With better demand and the outlook of less supply in the fall, the hog market feels very supported at these levels.

Corn: The corn market continues its poor performance and cannot find any news to entice buyers into the complex. As of right now, the weather is not threatening to the corn crop, but with the current carryout and demand picture the USDA has painted, any hiccup in production will make the balance sheets very tight. Soybean oil saw big losses this week after the less than positive news regarding biofuel blending, which sent the soybean market 30 cents lower on Thursday. Between the lower soybean market and the wheat market that cannot seem to find traction, corn has no alliance to work higher. Corn exports for the week ending May 8th were again impressive and are now on pace to beat this week’s revised higher export goal by 100 million bushels.