6/6/2025 Market Commentary

Live Cattle: Live Cattle futures set new contract and all-time highs again this week, breaking through the 220 level for the first time ever and accelerating past it as the June contract posted a high of 226.750 today. This week marks the 8th week in a row of a higher cash market, and sharply higher every week at that. Since the beginning of April the cash market in the North has gained $30/cwt on a live basis, and the futures have been playing catch up the entire time. Cash trade in the North was 240-244 live and 380 dressed. The South saw a wide spread of cash prices, anywhere from 225 to 235. Boxed beef was steady at best this week and failed to find much upside support the entire week. A steady product market and a higher cash market is adding extra pressure to packer margins. Open interest in the Live Cattle complex climbed to 417,000 after yesterday’s trade, which is the highest for 2025. The all-time record was set in March of 2019 at 455,000 contracts. Interesting to note, the CME is saying that option open interest within the cattle complex is currently record large. The headline in the cattle market continues to be the lack of market-ready fat cattle and all of the leverage is in the feedlot’s hands. While front month futures are forced to converge with the current cash market, the deferred contracts are hesitant to rise as quickly.

Feeder Cattle: The CME Feeder Cattle index posted a new record this week as cash feeders continue to move higher. The current index is at $306.16 which is up $1.30 after Thursday’s sales. This is a $6.86 gain compared to a week ago. As of the close of trade on Tuesday June 3, the managed money was long 34,827 contracts, up 1,569 contracts on the week and is also a new record long position. Talks of the current situation surrounding the Mexican border have quieted down but the closure due to screwworm is still a main topic within the feeder cattle complex. With no current end date available, the question remains how long will the closure last. The USDA said they would review the situation on a monthly basis, but many are beginning to speculate that imports will be shut off until at least December 2025. This would continue to keep the number of available feeder cattle at very tight supplies to U.S. feedlots.

Lean Hogs: The pork cutout continues to gain strength as the morning cutout was up $4.74 at $112.86. All primal cuts showed positive numbers with the bellies leading the charge with a $10.58 increase. With the exception of the nearby June contract, every contract month for Lean Hogs posted new contract highs today. With the continued rally in the pork cutout and talks of disease pressure creating short hog numbers, the futures market has been well supported and the rally continues to be sustained. The June contract will expire next week on Friday and the Lean Hog index is currently $4.25/cwt behind at $98.37. Weekly export data out yesterday showed a total of 36K tonnes for the week, 13K tonnes to China and 12K tonnes to Mexico. This is a 19% increase from the previous week and 25% increase from the prior 4-week average.

Corn: Corn futures finished the week higher after a very quiet week of trade. The U.S. weather outlook continues to look favorable for corn production and has yet to give the managed money a reason to liquidate their short position. For the week ending June 3, the managed money was sellers of 53,283 contracts bringing their net short position to 154,043 contracts. Exports this week were at the lower end of expectations but the U.S. remains nearly 6% ahead of the pace needed to meet the current USDA goal. Prevent Plant acres have been the main topic of debate over the course of the last week with portions of the eastern corn belt, namely Ohio, finding limited windows to get the corn acres planted. The question is how many acres that were intended for corn did not get planted. The market will not get a hard answer from the USDA for many months, but at the current time the market does not feel threatened by the loss of a million or more corn acres.