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Hogs Surge Whereas Cattle Markets Fall at Month Finish
July Lean Hogs opened larger and made the session low at 102.875. Worth turned larger and rallied into late morning to the excessive at 105.35. It turned decrease from the excessive however got here again on the finish of the day to settle close to the excessive at 104.925. Pleasure is constructing within the Hogs because the money market is strengthening. The cutout is rallying, and we should always see a leap within the index on Monday morning. Our exports are enhancing at the same time as China was out of the market on the final report. Demand is powerful and provide is tightening as our slaughter numbers and weights head decrease. We’re within the grilling season and will proceed to see cutouts rally because the retail trade tries to purchase cheaper product to beat the high-priced beef merchandise. If they will characteristic pork going ahead, we may see a rise in demand and drive costs larger. The futures rally took worth previous resistance at 104.35, which places resistance at 106.85 in merchants’ crosshairs. We’ll see!… If Hogs can maintain settlement, it may transfer in direction of resistance at 106.85. Resistance then is available in at 107.925. A failure from the important thing degree at 104.35 may see worth check assist on the rising 8-DMA now at 102.475. Assist then is available in at 101.975.
The Pork Cutout Index elevated and is at 102.58 as of 05/29/2025.
The Lean Hog Index elevated and is at 94.13 as of 05/28/2025.
Estimated Slaughter for Friday is 475,000, which is above final week’s 424,000 and under final 12 months’s 481,522. Saturday slaughter is anticipated to be 254,000, which is above final week’s 10,000 and final 12 months’s 239,377. The estimated slaughter for the week (to this point) is 2,163,000, which is under final week’s 2,362,000 and above final 12 months’s 2,162,210.
August Feeder Cattle hole opened larger and rallied to the excessive of the day at 302.25. The opening rally lastly closed the hole from the Might 14th low at 301.325 to the Might fifteenth excessive at 300.80 and It additionally topped simply above resistance at 301.90. On this hole shut merchants adopted the 80-20 – hole rule the place worth reverses within the course of the hole after closing the hole. This noticed promoting are available and take worth all the way down to the low of the day at 298.325. The breakdown took worth under the important thing degree at 299.90 and it stalled on the 8-DMA now at 298.40. It consolidated into the shut and settled close to the low at 298.825. The breakdown on Friday might be the results of month-end revenue taking that noticed Feeder Cattle make a brand new all-time excessive at 307.675 for the lead contract. The month-to-month technical outlook for my part ended up as a doubtlessly topping candlestick. Now we have seen a powerful rally within the Feeder market and the worth motion in Might resulted in a small-bodied candlestick that might point out indecision and a possible to see an even bigger pullback as we head into June. Settlement was within the decrease finish of the month-to-month vary, which may see extra promoting if we begin the brand new month in adverse territory. Fortuitously for bullish merchants, nevertheless, many of the bearish candles have ben negated on this surge in worth. The index, which was launched after the shut, was larger as money costs stay unaffected by the futures market. We’ll see!… A breakdown from the 8-DMA may see worth re-test assist at 297.80. Assist then is available in at 293.80. If settlement holds, worth may check resistance at 299.90. Observe by way of to the upside may see resistance re-tested at 301.90.
The Feeder Cattle Index elevated and is at 299.30 as of 05/29/2025.
August Stay Cattle hole opened larger and rallied to the excessive of the day at 211.60.The opening run larger took worth previous resistance at 210.975 and the 21-DMA now at 211.25. It was additionally a brand new excessive for the August contract since taking on because the lead contract. However, with the month coming to a detailed, revenue taking ensued and worth shortly reversed course and broke all the way down to the low of the day at 209.25. Bulls tried to get worth shifting larger after the low, but it surely failed to carry, and it broke down in direction of the low on the finish of the day to settle at 209.35. The breakdown stalled slightly below assist on the rising 8-DMA now at 209.25 with settlement simply above it. The month-to-month chart for my part appears extra adverse than the Feeder month-to-month chart because it settled under the opening worth for the month. It additionally closed within the decrease finish of the month-to-month vary as futures proceed to current bearish technical whereas the money market continues its bullish run. Money made one other leap larger this week making a brand new all-time excessive worth on Friday at 237.00 on a reside foundation as money individuals ignore the worth motion within the futures. The packer continues to be underneath siege, having to get aggressive, principally up north to accumulate product. That is with continued slowdowns within the slaughter charge. Are the Cattle on feed numbers off? It appears the packer can’t discover product to purchase, in order that they transfer worth larger till they will discover prepared sellers. That is vastly completely different from 2017 to 2019 once they would sit again and let the producer squirm earlier than they purchased product. Dressed costs additionally surged to a brand new all-time excessive, this time at 376.00. Exports are first rate and demand for my part is powerful, and the cutout worth is reflecting this, making a brand new excessive on Friday at 366.24(save for the pandemic surge) because the retail trade gears up for the summer season. Customers are loving their beef at the same time as they grumble in regards to the excessive costs they’re paying. That resurgence of the need to eat beef is one good factor that got here out of the pandemic, for my part as shoppers realized that beef is scrumptious and good for them. They appear to have discovered that they wish to prepare dinner their very own beef and proceed to attempt new issues. Perhaps they’ll transfer to cheaper cuts and discover new methods to organize the meat. Money and futures appear to need to transfer in several instructions, however as we’ve seen, adverse futures patterns appear to be negated time after time by the imposing run up in money costs. Can the patron proceed to eat costly beef? Will a adverse sample hold the strain on futures within the brief run? Can money hold making new highs? We’ll see!… If worth trades under settlement, it may re-test assist on the 8-DMA. A failure from right here may see a check of assist at 208.80. If worth can overcome resistance at 210.975, it may method resistance at 214.325. Resistance then is available in at 215.60.
Boxed beef cutouts had been larger as selection cutouts elevated 0.25 to 366.34 and choose jumped 3.01 to 356.65. The selection/ choose unfold narrowed and is at 9.69 and the load depend was 85.
Friday’s estimated slaughter is 117,000, which is above final week’s 97,000 and under final 12 months’s 121,787. Saturday slaughter is anticipated to be 5,000, which is above final week’s 2,000 and under final 12 months’s 43,345. The estimated complete for the week (to this point) is 477,000, which is under final week’s 570,000 and final 12 months’s 538,910.
The USDA report LM_Ct131 states: Up to now for Friday, negotiated money commerce has been mild on excellent demand in Nebraska and the Western Cornbelt. In Nebraska, in comparison with Thursday, reside purchases traded 1.00 larger starting from 235.00-237.00, principally at 236.00. The most recent established dressed market in Nebraska was on Thursday with dressed purchases from 365.00-370.00. Commerce was inactive on average demand within the Southern Plains. Not sufficient purchases in another feeding area for an enough market check. The most recent established market within the Texas Panhandle was on Thursday with reside purchases starting from 221.00-223.00, principally at 223.00. The most recent established market in Kansas was on Thursday with reside purchases at 222.00. The most recent established market within the Western Cornbelt was on Thursday with reside purchases starting from 230.00-235.00 and dressed purchases at 371.00.
The USDA is indicating money trades for reside cattle from 215.00 – 237.00 and from 362.00 – 376.00 on a dressed foundation (to this point).
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Ben DiCostanzo
Senior Market Strategist
Walsh Buying and selling, Inc.
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