8/5/2025 Market Commentary

Live Cattle: Live Cattle futures spent the entire day in positive territory as the hopes for better boxed beef and cash markets spurred fund buying. The August contract pushed to a new contract and all-time record high today as the front months continue to outperform the deferred contracts. Boxed beef has started the week higher as lighter kill numbers continue to support prices. Choice was up $4.61 to $370.40 while select was $4.42 higher at $346.01. Slaughter last week was estimated at just 535,000 head, which was a multi-year low. Early estimates for this week are for a similar number. There has been limited cash news up to this point in the week, but with the higher futures market, feedlots will be asking for higher money than a week ago. Last week’s weighted averages showed a more than $10 spread between the North and the South. This spread typically begins to narrow, and the South actually takes a premium, as we head into the end of the year. This year should be no different, especially with the tighter numbers of cattle on feed in the southern states. According to last month’s Cattle on Feed Report, Texas has 8% less cattle on feed than they did a year ago.

Feeder Cattle: Feeder Cattle futures also posted new contract and all-time highs today in the August contract. The futures market has been playing catch up to the relentless cash market, and the futures are now trading at a premium to the CME Feeder Cattle index. After Monday’s sales, the index is at $336.03 which is a new record, and currently $5 below the August futures contract. Open interest in the Feeder Cattle complex remains at record high levels as fund money continues to flood into the market. Last Friday’s CFTC Report showed the managed money as small sellers of Feeder Cattle for the first time in four weeks. There have been multiple times in the last week where the Feeder Cattle charts have flipped negative and showed a textbook reversal lower, only to find support and come roaring right back. The bottom line is that the fundamentals and tight numbers have not changed, and futures will stay supported unless there is a negative outside factor that enters the market.

Lean Hogs: The Lean Hog complex saw gains across all months today as October gained 1.900, finishing the day at 92.800, which is back above the 50-day MA of 91.675. The pork cutout has had three consecutive days of gains and is now at $118.29. Cash is also higher to start the week with this morning’s cash average reported at $110.98 with a high of $113.50. Friday’s CFTC Report showed the managed money liquidating 3,000 contracts, but still remain in the top 25% of their historical position. Hog slaughter is down 3% compared to last year, and this will continue to be positive for the pork cutout going forward.

Corn: New crop Corn futures have posted a new contract low both days this week as traders find no reason to buy the Corn complex. Demand that is okay, but not great, combined with what looks to be a massive crop in the field has given the Corn market no reason to rally. Crop conditions released yesterday afternoon were steady with a week ago. Trade expectations were for the Corn condition to fall 1%. Export demand remains solid and above the USDA export goal with just four weeks remaining. Long term support for the Corn market is the low set last August at 360 1/2.