6/27/2025 Market Commentary

Live Cattle: Cash trade was lower this week but was better than initial thoughts from earlier this week. The North traded cattle from 230 to 233 and the South traded from 222 to 225. Basis remains very strong, especially for those that are hedged in the August contract. There was no real news that sparked the futures higher this morning other than the boxed beef market that traded to new highs. Choice boxes are now at $396.19 up $1.14 this morning, while select is at $382.26 up $2.52. This is the highest that boxed beef has ever been with the exception of Covid when choice boxes climbed to $475.39. This should definitely entice the packers to speed the chains back up and increase slaughter. Average carcass weights were unchanged this week and are now 16 pounds heavier than a year ago. The good cash market along with outstanding basis has helped to keep cattle current and pull cattle out of feed yards earlier than originally planned.

Feeder Cattle: Feeder Cattle futures continue to trade at a discount to the current cash market and the CME Feeder Cattle Index. Today’s move higher helped narrow that gap, but the nearby August contract is still at a $4.07 premium. That will not need to narrow up until the end of August when the August contract expires, but up until today, the futures were in no hurry to keep up to the index. Corn continuing to trade lower has definitely helped the cash feeders, along with very good basis for feedlots when selling cattle. The managed money remains near record long. As of last Tuesday, the funds were long 35,506 contracts, just 456 below the record set two weeks ago.

Lean Hogs: Lean Hog futures traded lower most of the morning following the USDA’s release of the Hogs and Pigs Report yesterday afternoon. Futures did level off later in the day and the nearby months ended up trading higher. All hogs and pigs were slightly higher than the average trade guess ahead of the report. The 75.137 million total hog inventory is the highest number for June 1 since before Covid. Market hogs were higher than expected in all categories except the hogs larger than 180 pounds. Not much of a surprise that market ready hogs are in tight supply as the industry has watched the pork cutout and cash markets trade higher over the last eight weeks. Export sales released yesterday showed very good pork sales. Mexico was the featured buyer and accounted for 60% of the sales. Hog prices in Mexico have increased in the past few weeks making U.S. pork more attractive. As of last Tuesday, the managed money was long 134,292 contracts. This is a new all-time record.

Corn: Corn futures finished the day higher on Friday after losing over 20 cents through the first four days of the week. Rainfall was very widespread across majority of the corn belt throughout the week, most seeing sizable total amounts of moisture. Talking with many clients in the heart of Iowa this week, many noted their crop has never looked this good and are now headed into July with ample moisture. The thought of large production has kept prices deflated up to this point and with how things look currently, production will be huge. Demand has been very good up to this point of the year, but the market has not seen any new demand or big increases come into play. On Monday, the USDA will release Grain Stocks and Plated Acres Reports. Pre-report estimates are showing corn acres to be very similar to what the Prospective Planting Report showed in March, while stocks are expected to decrease. Monday’s report has the chance of causing big swings in the market, but there are fears the trade has left some premium in the futures price in case there is a decrease in acres. A neutral report could very well be bearish to the corn market.