7/29/2025 Market Commentary

Live Cattle: Live Cattle futures traded to new contract highs today across the entire complex as the futures market continues to converge to the cash market. The futures market has closed the gap with the cash market over the last month, and is now only 1.275 below the Texas weighted average of $230.90 from last week. The August contract posted a new all-time high today of 229.900, taking out the previous high of 229.125 that the June contract traded to on June 12. Boxed beef continues to be under pressure even with the slower chain speed at packing plants. This morning choice was down $0.88 to $366.85 and select was down $4.33 to $342.52. Total slaughter last week was 549,000 head, over 56,000 less than the same week last year. Packers continue to idle back chain speed in an attempt to keep boxed beef prices supported, as well as stretch out the supply of ready fat cattle. Last Friday’s Cattle on Feed Report showed an 8% decrease of cattle on feed in Texas, as well as an 18% decrease in placements in the month of June. This does not paint a great picture for the record basis we have seen in the North to hold into the fall. Tighter numbers in the South should converge the two cash markets, and at a minimum, draw the board closer to the North cash trade.

Feeder Cattle: Feeder Cattle futures also traded to new contract and all-time highs today as the managed money continues to build onto their record long position. The CME Feeder Cattle index is quoted at $332.20 through Monday’s sales, which is also a new record high. Continued tight supplies of Feeder Cattle, and the Corn market that fails to find support, have increased the cost of Feeder Cattle in sale barns. Even after today’s higher index quote, the futures have built a $4 premium to the index. Friday afternoon’s Cattle Inventory Report showed the 2025 calf crop to be 1% less than 2024, at 33.1 million head.

Lean Hogs: The Lean Hog complex was lower across all contract months today. The October and December contracts saw the biggest losses as both traded over $2.000 lower. The pork cutout remains stagnant even with last week’s hog slaughter estimate coming in at 2.328 million head, just over 100,000 head less than the same week a year ago. Pork production is lagging the USDA estimate for 2025 as well as levels from a year ago. Last Friday’s CFTC report showed the managed money as net sellers of 10K contracts now holding a net long position of 110K contracts. With 12 trading days left for the August contract, the Lean Hog index is $3 above the August contract. This will narrow over the next two weeks.

Corn: Corn futures traded lower the entire day and tested contract lows this morning. The massive U.S. corn crop remains at the front of all of the traders minds as changes to demand have been few and far between. There has been a good string of flash sales of corn exports over the last three days, and exports look to exceed the USDA’s goal for the current marketing year with just four weeks remaining. Cash basis continues to drift lower for both old crop and new crop. Production for 2025 is becoming more certain as we continue to move toward the end of the growing season. Farmers being forced to clean out bins and make room for that crop has began to provide pressure to the old crop bids. There has been a lot of chatter today about the impact of the storms that traveled through parts of South Dakota and moved across Iowa last night. There is definite wind damage in the areas affected by the storm, but the extent of that damage will not be realized by the market for some time, if it impacts the market at all.