6/20/2025 Market Commentary

Live Cattle: Live Cattle finished the volatile week on a lower note after giving up big gains from this morning. The cash market traded lower this week, and was the first notable week lower in nearly two and a half months. The lower cash market was matched with a boxed beef market that has exploded higher throughout the week. Choice boxes are up $12.47 compared to last Friday and are currently at $390.35. Select was up $1.56 this morning to $376.15 and is $10.65 higher than a week ago. The better beef markets will certainty entice packers to crank up the chain speed in coming weeks as their margins improve. Cash cattle in the North traded anywhere from 235 to 238 and most of the trade took place in the middle of the week. Hedgers were faced with an exceptional basis as most hedges are currently against the August futures contract. Many cattle are being pulled ahead and being sold lighter than originally planned to capture that basis. Most packers are buying cattle with time as well, which is letting the feedlots set the cash price, enjoy the basis premiums and feed those cattle for nearly another month. The USDA released their monthly Cattle on Feed Report this afternoon. Cattle on feed were 98.8% of a year ago. Placements were down 7.8% and marketings were down 10.1% compared to last May. Cattle on feed in Texas are down 7% compared to a year ago as available feeder cattle have been, and continue to be, limited with the closure of the Mexican border.

Feeder Cattle: Feeder Cattle futures also erased big gains from early this morning finished the day near their lows. Fund activity seems to be the theme within the Feeder Cattle complex as extreme intraday volatility is seen almost everyday. Open interest remains steady even with the volatility that has been taking place. Today’s Cattle on Feed Report showed lighter placements in Texas compared to a year ago. Placements during the month of May in Texas were down 17% compared to 2024. The closure of the Mexican border continues to keep available Feeder Cattle at limited numbers, making it hard for those feed yards to find cattle to place. There were no other huge changes within the placement category other than Colorado being 29% less than a year ago.

Lean Hogs: The pork cutout has lost its daily higher moves like we have seen in past weeks, but has held steady throughout the week. At the beginning of June, the cutout was at $106.75 and this morning’s cutout was $121.44, resulting in a gain of $14.69 over a 20-day period. The national hog cash price has seen strong gains as well, jumping $7 just this week. Two years ago was the last time we had seen $113+ cash hogs. Cash hogs eventually rose to $130 that same summer. The 2-day Lean Hog index is at $107.59 which is a $5 discount to the July futures. July posted a new contract high of $113.025 today. The spike in cash can be contributed to the seasonal downward trends in weight due to the shortage of market ready hogs. The interesting fact about the lower weights is that we are seeing the packer-owned weights falling at a faster rate than the producer-owned hogs. Disease pressure in the large integrations is creating a hole in production numbers and is forcing some of those integrators to pull ahead hogs to help the shackles remain full.

Corn: December Corn futures started the day higher as heat enters the forecast for most of the corn belt, but could not hold those gains throughout the day. Up to this point, there have been very limited, if any, weather scares that threaten U.S. corn production. Most years the corn market tops around the 20th of June as the market has a glimpse of the coming weather into the beginning of July. The rally that is typically seen to start the summer has not taken place this year as the managed money continues to carry a very large short position, especially for the time of year. Exports were good again this week and Japan was the featured buyer. The U.S. is now over 150 million bushels ahead of the pace needed to meet the new export goal from the USDA. Weather forecasts will be front and center as we head into the Fourth of July holiday and will dictate much of the movement that will take place.