5/27/2025 Market Commentary

Live Cattle: Rumors of screwworm entering into the state of Missouri led to a free fall within the cattle complex this morning. A radio station released an article that there had been screwworm detected in Missouri, citing the USDA and a financial package to the state to fight the spread. That article was quickly removed but the futures damage had already been done. The USDA confirmed after 2pm today that the reports of screwworm in the U.S. were indeed false. The Live Cattle complex traded as much as $4 lower at one point this morning before finishing $1 lower on the day. This is a reminder of how susceptible the cattle complex is to news at these all-time high levels and the volatility that can come with it. Cash trade last week was higher across all regions, mainly 230 in the North which traded a fair amount of cattle, and 221 in the South but on very limited numbers. Tight supplies of ready fat cattle remain as packers are beginning to have more inventory around them. Boxed beef started the week mixed as choice was down $1.36 and select was up $0.15 in this morning’s report.

Feeder Cattle: Feeder Cattle futures were hit the hardest surrounding the screwworm rumors. Futures traded nearly $7.500 lower at one time this morning and looked to be going down to the $8.250 limit lower before validity of the news faded. The CME Feeder Cattle index continues to fade lower, quoted at $296.09 after Friday’s sales. This is $6.32 off its highs of $302.41 on May 14. All future months finished below the 300.000 level again today and right at, or just below the 20-day moving average. Technically not a great look for the Feeder Cattle complex and definitely does not give traders a lot of optimism that the Feeder Cattle can survive above the 300.000 level. After all, the cash fundamentals were what led Feeder Cattle to this level, and a stagnant to lower cash market has removed that optimism and buying within the complex.

Lean Hogs: The Lean Hog complex started the day lower before trading and finishing higher. The pork cutout moved higher again on Friday and is now at new highs after falling stagnant for the prior five days. The Cold Storage Report on Friday showed pork stocks down 9% compared to a year ago, but the monthly build in stocks was much larger than normal. There may be less in storage than a year ago, but the replenishment of those supplies is climbing quicker than normal. Carcass weights last week saw a steep decline, bringing the industry back to the same as a year ago. Carcass weights had been running larger than a year ago due to better economics at the producer level.

Corn: Corn futures fought head winds all day as the wheat complex was sharply lower and crude oil traded slightly lower. No startling news or changes in weather models during the long weekend led to the managed money adding to their short position. President Trump agreed to leave tariffs on the EU the same through the beginning of July. At the end of the day, the EU is not a huge purchaser of U.S. commodities, but a customer nonetheless. Overall within the grain complex, there is good weather for most of the corn belt that has given the crop a good start, there are no current weather threats that will hamper production and there is steady demand that is keeping our carryout in check. A hiccup or change to any of these would give the market some news to trade outside of the current ranges and force the funds to make a move one way or the other.