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Cattle Markets Make New All-Time Highs, Hogs Higher
If you would like to receive more information on the commodity markets, please use the link to join our email list -Sign Up Now For those interested I hold a weekly livestock webinar on Tuesdays, and my next webinar will be Tuesday, May 13, 2025, at 3:15 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar. June Lean Hogs gap opened higher and Raced to the session high at 99.875. Thee rally stalled below resistance at 100.075 and turned lower. It broke down for the rest of the session to the low at 97.975. It settled near the low at 98.30. The breakdown stopped just a tick above the Friday high at 97.95 leaving the gap in place with a 1-tick gap. The initial rally came about as trade tensions are easing. The US/ China tariffs punitive tariffs have been postponed on both sides for 90-days as the two governments agree to attempt to come together and work on easing trade tensions. The progress at the weekend meeting was impressive as both sides look to ease the tensions between the two powerful countries. The June contract surged along with the deferred contracts, but June failed to hold onto its early gains and was pressured for the rest of the session. Traders must be fearing the progress expected will occur too late to help the June futures as the cutouts and Cash market have struggled recently and may take longer to improve their fortunes. China has practically eliminated buying US pork and has even cancelled orders they have previously committed too. Maybe traders think it will take longer for the Chinese to start buying pork again from the US and it could keep a lid on cutouts in the short run and keep cash honest. The nearer term deferred contracts, however, took off and held their gains as they have more of an opportunity to see results during the cooling-off phase as the negotiations take place. In my opinion, it would be in China’s best interests if they go hog wild and start loading up on pork products to show good faith. We’ll see!... If Hogs can get above resistance at 98.475, it could re-test resistance at 100.075. Resistance then comes in at 101.975. A failure from settlement could see price revisit support at 97.10. The Pork Cutout Index ticked lower and is at 96.08 as of 05/09/2025. The Lean Hog Index ticked lower and is at 89.99 as of 05/08/2025. Estimated Slaughter for Monday is 466,000, which is below last week’s 482,000 and above last year’s 464,496. August Feeder Cattle gap opened higher and surged. The rally took price to unprecedent heights as it made a new all-time high yet again at the end of the session at 306.90. It settled near the high at another record close at 306.375. The low was at 303.025. The gap is in place from the Friday high at the prior all-time high price at 301.90. The easing of tensions was helpful but the US ag secretary closing the border for Mexican cattle was in my opinion for the surge in price. The New World Screwworm is making its way North and is in at least Central Mexico and the US doesn’t want any part of that scenario. The Screwworm may even be closer than we know and the previous Mexican reluctance to allow the US to provide support to the eradication is once again causing problems for the Mexicans. They need to step it up and allow the Americans to do their thing and provide the skills and support necessary to get rid of the pest. It was a positive aspect when the Mexicans backed down on the threats from the USDA after denying US access to Mexico to aid in the efforts to tackle the Screwworm. But did it come too late? The closure of the border to the Mexican cattle will likely be on a month-to-month basis . It will depend on how well efforts are to contain the Screwworm and its Northward advance. We’ll see!... With a new all-time high established, we will look at pivot resistance numbers. The daily pivot R1 is at 308.15, R2 is at 309.45 and R3 is at 312.05. A breakdown from settlement could see price test pivot support at 305.60. S1 is at 304.30 Gap support is next. The Feeder Cattle Index surged and is at 301.03 as of 05/09/2025. June Live Cattle gap opened higher and raced to the high of the day at 217.75. Success didn’t last, and the market caved. It broke down and traded to the session low in a likely attempt to close the gap and it failed to do so. The low came in at 215.80, leaving a small gap with the Friday high at 215.60. The market drifted for a bit and then rallied into the close to settle near the high at 216.825. Cattle continues to impress with another new all-time high made on Monday for both the high and the close. With the cash market continuing its unprecedented march to new heights, reaching 230.00 on a live basis and 363.00 on a dressed basis last week, this was enough to send prices upward in the futures. But the thawing of tensions between the US and China sparked cattle futures as traders hope China resumes buying beef from the US. I think, however, the fact the Chinese have not renewed the registrations for the US processors is a sticking point and maybe why cattle couldn’t create in my opinion a strong bullish candlestick. In fact, IT is my belief the Monday price action was bearish in it formed a small bodied candle indicating uncertainty at this level. There is obviously a lot of negotiating still to come which will keep the market on edge and traders reacting to every bit of news that comes out of sound bites from the two parties. There is also the cutout worry and the cattle slaughter slowdown. The packer is striving to slow slaughter enough to drive the cutout higher as we move into the seasonal buy. It is starting to work as production has sagged in the past few weeks, and the cutout is starting to respond. It just reached its highest point on Monday, and it looks like it could break above 350 this week for the choice cutout as the load count was respectable with the jump in cutout prices. The slowdown in slaughter and the heavy cattle buying numbers the past two weeks could also be the packer trying to get enough cattle in front of them while they slow production to give them enough inventory to cut the price they pay for cattle. Mind you, this thought process is all done individually by each packer…. Right. We’ll see!... If price trades below settlement, it could test support at the gap. If price can overcome the all-time high, pivot resistance comes into play. R1 is at 217.85, R2 is at 218.775 and R3 is at 219.80. Boxed beef cutouts were higher as choice cutouts jumped 2.17 to 348.14 and select surged 4.06 to 335.23. The choice/ select spread narrowed and is at 12.91 and the load count was 115. Monday’s estimated slaughter is 99,000, which is below last week’s 109,000 and last year’s 114,524. The USDA report LM_Ct131 states: So far for Monday, trade in all feeding regions has been mostly inactive on moderate demand. The last market test in the Texas Panhandle was last week with live purchases at 219.00. The last market test in Kansas was last week with live purchases from 218.00-220.00. The last market test in Nebraska was last week with live purchases from 225.00-228.00 and dressed purchases mostly at 355.00. The last live market test in the Western Cornbelt was last week from 225.00-228.00 with a few dressed purchases at 355.00. The USDA is indicating cash trades for live cattle at 225.00 and nothing on a dressed basis (so far) **Call me for a free consultation for a marketing plan regarding your livestock needs.** Ben DiCostanzo Senior Market Strategist Walsh Trading, Inc. Direct: 312.957.4163 888.391.7894 Fax: 312.256.0109 Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member. This article contains syndicated content. We have not reviewed, approved, or endorsed the content, and may receive compensation for placement of the content on this site. For more information please view the Barchart Disclosure Policy here.
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