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Hogs Rally and the Cattle Markets Surge
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August Lean Hogs opened lower and made a new low for the down move at the session low at 105.50. Price then turned higher and rallied to the high of the day at 107.725. A weak market in the grain arena helped turn the tide in my opinion and then a surprising surge in the morning cutout took price to the high. The rally took price above Thursday’s high (107.675) but below resistance at 107.925. The price action formed an outside up candlestick as the Monday range was wider than the Thursday range and it was a positive candle. It then consolidated near the high for the rest of the session and settled at 107.10. The turnaround in the cutout was led by a surge in the belly, with all cuts strongly positive. The afternoon cutout kept most of its gains as the belly held most of its morning gains and the rest of the cutout’s prices staying up for the session. This could help the early price action on Tuesday. We’ll see!... If Hogs can get above 107.925, it could challenge resistance at the declining 8-DMA now at 108.375. Resistance then comes in at the rising 21-DMA now at 109.225. A failure from settlement could see price test support at the 106.85. Support then comes in at 104.35. The Pork Cutout Index decreased and is at 113.25 as of 07/03/2025. The Lean Hog Index increased and is at 109.51 as of 07/02/2025. Estimated Slaughter for Monday is 478,000, which is above last week’s 469,000 and last year’s 462,555. August Feeder Cattle opened lower and made the low at 308.70. Price reversed course and rallied the rest of the session to the high and a new all-time high for the lead contract at 314.60. Settlement was near the high and it was a new all-time high settlement at 313.725. Traders, in my opinion were galvanized by the crash in corn prices. With corn breaking down and weather conditions great in most growing areas, assumptions seem to be that corn weakness will prevail and feeder cattle prices will strengthen going forward. There are major video auctions going on and so far, they have been strong. The index has been choppy recently after peaking at 317.10 in the middle of June. The index is below the futures now with the rally in the futures. With large amounts of cattle to be sold over the coming days and weeks and corn prices low, will feedlots continue to bid up price? We’ll see!... A breakdown from settlement could see price test support at 311.90. Support then comes in at 310.55. If settlement holds, price could test pivot resistance at 316.35. R2 is at 318.45 and R3 is at 322.25. The Feeder Cattle Index increased and is at 311.96 as of 07/07/2025. August Live Cattle opened lower and made the low at 213.10. The low tested support at the rising 21-DMA now at 213.60. It held and price rallied to the session high at 216.40. It consolidated near the high the rest of the session and settled near the high at 215.90. The rally took price above resistance at 215.60. Weak corn, aa higher morning cutout and a lower guestimate on this week’s showlist sent prices higher, in my opinion. Plus, the surprising cash price was steady last week and with a lower expected showlist, traders are likely thinking we will see higher cash prices this week as packers couldn’t keep price on a downward trajectory. The cutout is stable and packers may have turned the corner if the cutout can stay up here instead of going into its normal seasonal decline. A failure from here could see price test support at 214.325. Support then comes in at the rising 21-DMA. If price can hold settlement, it could test resistance at 217.75. Resistance then comes in at 218.625. Boxed beef cutouts were mixed as choice cutouts increased 1.23 to 390.98 and select decreased 0.91 to 377.53. The choice/ select spread widened and is at 13.45 and the load count was 94. Monday’s estimated slaughter is 114,000, which is below last week’s 118,000 and above last year’s 112,066. The USDA report LM_Ct131 states: So far for Monday, negotiated cash has been inactive on moderate demand. The last established market in the Texas Panhandle was last week at 224.00. The last established market in Kansas was last week from 224.00-225.00. The last established market in Nebraska was last week with live purchases from 230.00-232.00 and dressed purchases at 368.00. The last established market in the Western Cornbelt was last week with live purchases from 230.00-234.00 and dressed purchases at 368.00 on a light test. The USDA is indicating no cash trades for live cattle and on a dressed basis (so far). **Call me for a free consultation for a marketing plan regarding your livestock needs.** Ben DiCostanzo Senior Livestock Analyst 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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