7/8/2025 Market Commentary

Live Cattle: Live Cattle futures posted new contract highs today as fund buying leads the cattle complex higher. There is no news that supports the market trading nearly $6 higher through the first two days of the week, but the move looks to be entirely because of fund buying and the managed money sector of the market defending their long position. Cash cattle this week is expected to be higher. Late last week, there were multiple major packers paying $233 in the North and that provided the optimism for a better market this week. Many feedlots are scared to set an asking price at this point in the week, but the expectations are for something close to $5-6 higher than last week’s averages. Boxed beef has started the week higher each of the first two days. The expectation was for boxed beef to trade lower following the July 4th holiday, and although it has only been two days, boxes have not seen that pullback. CFTC data was released yesterday and the managed money were sellers of 3,431 contracts as of July 1, reducing their long position to 129,462 contracts. The all-time record is 156,909 contracts set this spring. The bottom line within the cattle complex is the cash fundamentals and boxed beef are outperforming expectations and the futures are left at a large discount. Now the futures are trying to catch up.

Feeder Cattle: The sharply lower corn market has led to massive fund buying within the Feeder Cattle complex to begin this week. The August contract has gained over $9.500 this week and went from a $4.500 discount to the index to a $7.100 premium in just two days. Cash Feeder Cattle continue to set new all-time records across all classes of cattle due to tight inventory and feed costs that continue to get cheaper. The worries of the Mexican border opening this week sent the market sharply lower to start last week but those worries have since been forgotten. The USDA opened one port this week and four more ports will be opened over the course of the next three weeks. More Feeder Cattle will be available to the feedlots, especially in the South over the next month, but that does not make up for the lost imports since the border has been closed, and inventory of feeder cattle within the U.S. remains record small.

Lean Hogs: It was a quiet day in the Lean Hog complex. The biggest mover in the nearby contracts was August being down $0.325. The July contract expires next Tuesday, and is currently $1.350 below the Lean Hog Index. That spread will continue to narrow over the course of the next week. The pork cutout posted a small gain of $0.27 this morning, but still remains $9.00 off the high from two weeks ago. May’s pork export data showed that the U.S. is 3% behind from this same month last year. For the year, pork exports are 4% behind a year ago. Slaughter rates have decreased from a year ago for eight consecutive weeks now, which could be the effect of disease pressure producers were having last winter.

Corn: Corn futures gained 25 cents from Wednesday’s low to Thursday’s high but all of those gains plus more have been erased in the first two days of this week. New contract lows were posted today throughout the complex. Last week, traders wondered if President Trump would comment on trade with China throughout his speeches like the one given in Des Moines, however, there was no such mention. This caused the market to erase the premium built last week, with help from the beneficial rains over the long weekend and extended forecasts that do not look threatening to production, as well as the funds adding to their short position. The managed money likely were buying back a portion of their short position heading into the long weekend in case President Trump did present some sort of positive news regarding China. The market opened lower Sunday night and never looked back. The USDA will release their monthly WASDE report on Friday. This is typically a quiet report unless there is an adjustment to U.S. yield. With the current weather and crop ratings, that does not look to be the case for this report.