7/22/2025 Market Commentary

Live Cattle: Live Cattle futures traded both sides of steady this morning and set new contract highs in the deferred months before finishing the day mixed. Cash trade has been quiet so far this week without a bid from the packers, and feedlots have yet to price cattle. Boxed beef continues its sideways to lower trade while the choice/select spread has now widened out to over $25. A wide choice select spread usually indicates very good demand, and based on all reports, this year is not any different. The large amounts of grinds and trims that are being imported into the U.S. may also be playing a factor in keeping the select cuts under pressure. This week’s kill looks like it will be relatively small as packers continue to idle back chain speed in an attempt to control margins. Monday’s slaughter of just 105,000 head was 12,000 head smaller then the week prior. A major plant in the North canceled their kill today and it does not look like they will kill tomorrow. Packers have been, and will continue to try to string out the available fat cattle as long as they can, and right now slowing the chain speed is the easiest way to do that. This also helps support boxed beef prices and in turn, help their profit margins.

Feeder Cattle: Feeder Cattle futures posted new contract highs all throughout the complex this morning as cash Feeder Cattle continue to set new records. The tight supply of available Feeder Cattle and feed costs that continue to decrease have created the perfect storm to push the futures market to all-time highs. The CME Feeder Cattle index was quoted at 325.80 through Friday’s sales which is a new record high. According to last Friday’s CFTC Report, the managed money sector were small buyers of the Feeder Cattle complex setting a new record long position of 37,569 contracts. The bottom line within the Feeder Cattle market is there is a lot of cheap feed, limited supplies of Feeder Cattle, record Live Cattle futures and outstanding basis on fat cattle sales which all equate to feedlots paying record prices for available Feeder Cattle.

Lean Hogs: The pork cutout has started the week off strong as yesterday afternoon’s report showed a gain of almost $2.00. The bellies and hams continue to be the large gaining primal cuts. Bellies have seen a $10 jump since last Wednesday and hams are $9 higher. Cash had a tremendous start this week seeing the national cash price increase over $4.00. Typically, there isn’t much cash trade until the middle of the week, but with the hot forecast for the next couple of weeks, packers might be trying to get ahold of what inventory is available before the numbers get tighter due to hogs backing off feed during the warm spell. The cash and cutout strength equates to a strong Lean Hog index. Today the index is at $108.20 and after yesterday and today’s higher futures trade, the August contract has narrowed the spread to only a $0.45 difference. After last Friday’s close, the spread was $1.50.

Corn: Corn futures resumed their lower trade after finishing higher four of five days last week. Beneficial rains were seen in many regions over the weekend and alleviated some of the concerns about the warmer weather’s effect on the corn crop. There has been no significant changes made to demand to help reduce the projected carryout. In fact, export inspections yesterday were disappointing and showed the smallest weekly total since December of 2024. With many trade deals still looming or gaining no traction, the big crop that the U.S. is currently producing has taken center stage in the minds of many traders. The USDA Crop Progress Report was released yesterday afternoon and showed the U.S. corn crop at 74% good to excellent which is unchanged from the previous week but 7% better than a year ago.