8/12/2025 Market Commentary

Live Cattle: Live Cattle futures followed the Feeder Cattle futures and boxed beef higher today. Choice boxes were $8.50 higher this morning to $390.02 and select was up $5.39 to $365.00. Both choice and select have gained nearly $20.00 since the same time last week as packers continue to throttle back the chain speed and reduce kills. The higher boxed beef prices will again entice packers to compete for cattle and slowly increase chain speeds. The cash market ended last week with a weaker tone and was overall a disappointment. Higher asking prices that began the week turned to a lower market by Friday, and at the end of the day the packers were pulling their bids. There are more market-ready cattle on the showlists again this week, but the higher move in the futures today will make the feedlots dig in and ask for higher money than a week ago. The USDA lowered their 2025 beef production estimate by 263 million pounds today due to slower than expected slaughter rates. Import estimates were also lowered significantly due to the Brazilian tariffs that are currently looming. Odds are that some sort of resolution will take place before the end of 2026, but as of right now, the USDA is factoring in the worst case scenario.

Feeder Cattle: Feeder Cattle futures finished the day sharply higher after gaining support from the lower Corn market. Cheap feed prices continues to drive the price of cash Feeder Cattle higher and add optimism for prices in the future. The CME Feeder Cattle index continues to move higher and is currently at $342.69 after Monday’s sales, setting another all-time record high. The Feeder Cattle index spent the first week of August trading sideways but has since resumed its move higher. Over the last two days the index has gained $5.48 and is just slightly behind the August futures contract. Open interest has decreased within the Feeder Cattle complex over the last week, which would indicate that some of the managed money has been stepping aside. Today’s move higher appears to have been lead by fund buying, most likely bringing those that had exited back into the market.

Lean Hogs: Lean Hogs started the week stronger in both the futures and cash markets. The market was unable to hold those gains today as cash was down $2.42 at mid-day while the futures sustained small losses through the May contract. The August contract expires on Thursday and is currently $0.47 below the Lean Hog index. The pork cutout was down $2.91 compared to yesterday’s mid-day report, with the biggest decreases in the belly and picnic primal cuts. President Trump agreed to a 90-day tariff pause with China to continue negotiations. Unfortunately China has been very inconsistent with their pork purchases so far in 2025. The funds were buyers of 2,000 contracts according to last week’s CFTC Report, raising their net long position to 109,000 contracts. This is the first week in over a month that the managed money was not sellers of the Lean Hog complex. In this morning’s WASDE report, pork production was lowered 294 million pounds compared to last year. Currently, pork production is 3% less than the inventory that the Hogs and Pigs Reports would suggest.

Corn: Corn futures faired relatively well considering all of the negative numbers that the USDA released at 11am this morning. Today’s WASDE report showed a huge increase in production for the U.S. in 2025, confirming big yields and more acres than originally thought. Harvested acres for 2025 were raised 1.9 million acres along with a 7.8 bushel an acre yield increase, pushing total production to a new record of more than 16.7 billion bushels for 2025, nearly 9% more than the July estimate. Demand was also increased due to the higher supplies and the expected lower prices. Ending stocks for the 2024/2025 marketing year were lowered 35 million bushels due to increased exports, but lower ethanol usage. Demand for next year was increased sharply. Corn used for feed was increased 250 million bushels, ethanol usage increased 100 million bushels and exports were raised 200 million bushels to a new marketing year record. All increases are expected due to the increased supply and competitiveness in the world market. Today’s report was a shock to most traders and pushed the Corn complex to new contract lows. The USDA typically uses small steps over the course of several months to make big changes. This month was far from that with the increase of harvested acres and the steep increase in yield coming all at once.