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June Lean Hogs is now the lead contract as its volume has exceeded the volume of the April contract. It opened higher and broke down to the low of the day at 95.65. The breakdown took price near support at 95.30 and it reversed course and rallied to the high at 98.625. A late session breakdown took price lower to settle at 97.475. The rally took price to resistance at 98.475 and the end of day breakdown took price to the key level at 97.30. June hogs continue to consolidate as traders wait for the cash market to do something. Cutouts continue to waffle back and forth from 95.00 to 102.00 with the index in a tight range. The Cash market has also been in a range and is in the lower end of its 89.00 to 91.22 recent range. Slaughter was lower this week as weather conditions slowed down the pace earlier in the week but weights are rising keeping production strong. Exports were weak and Mexico said it is working on increasing local supply to move away from importing supply. That will take time but they want to have more control over their food supply. They import over 45% of pork consumption and want to reduce that percentage. That could have far ranging consequences for producers in the States but will they be able to accomplish that feat? We’ll see!... A breakdown from settlement could see price re-test support at 95.30. A breakdown from here could see price test support at 93.50. If price can hold settlement, it could re-test resistance at 98.475. Resistance then comes in at 100.075.
The Pork Cutout Index increased and is at 96.38 as of 03/20/2025.
The Lean Hog Index decreased and is at 89.20 as of 03/19/2025.
Estimated Slaughter for Friday is 472,000, which is below last week’s 474,000 and last year’s 483,568. Saturday slaughter is expected to be 158,000, which is above last week’s 81,000 and last year’s 90,449. The estimated total for the week (so far) is 2,428,000, which is below last week’s 2,509,000 and last year’s 2,520,684.
May Feeder Cattle opened lower and rallied to a new all-time high for the lead contact at 290.625. This took price to just above R1 resistance at 290.20, Breaking the 290-barrier seemed to be too much for traders and price broke down from the high and crashed as the day wore on, trading down to the low at 284.40. It settled near the low at 285.10. In my opinion the nearness to the psychological 300.00 level and the upcoming Cattle on Feed report all conspired to wither away traders resolve and they cut back on long positions in front of the report. The breakdown took price below support at 286.55 and made its way to the rising 8-DMA now at 284.25, stopping just above it. It was a big reversal day in the Feeder market, taking away most of the week’s gains in the contract. The report summary is below. The Feeder Cattle index printed another new all-time high on Friday, see below. We’ll see!... A breakdown from the 8-DMA could see price test support at 282.35. Support then comes in at 279.825. If settlement holds, we could test resistance at 286.55. at the Friday high at 290.625.
The Feeder Cattle Index increased and is at 287.78 as of 03/20/2025.
June Live Cattle opened lower and grinded higher until news broke out that packers were bidding up cash prices. It sent futures into a tizzy, taking price to a new high for the week at 207.30. The high is just below the all-time high for the lead contract at 207.725. However, the cash news sent the spot contract to a new all-time high at 211.25 and then we saw the entire complex collapse in front of the Cattle on feed report. It seems traders who didn’t sell at the highs, starting panicking and price starting to cascade down feeding the fear and move lower as they took price downward. It stopped just below support at the rising 8-DMA now at 202.45 and settlement was at 202.775. To me, it seemed traders were shocked to see cash make new all-time highs at 215 and 340 on a dressed basis and felt it wasn’t real and wouldn’t hold going forward from this week. How can the packer continue to pay high prices for cattle when the cutout is lagging? How can the consumer continue to eat high priced beef? The packer is in a bind and they know it, in my opinion. I get stories all the time now from producers that the packer is worried about supply from here on out. Whether that is believable or not is up to you. These are the same people that always said the packer had control in the past. I don’t think they are spinning stories. They are in the market and see the packer continuously wait, wait and wait for the producer to behave the way they behaved during the time when we had loads of cattle waiting to be slaughtered at cheap prices. It seems we aren’t in Kansas anymore and the producer has a lot more patience than the packer at this stage in the cycle. Packers have to but cattle, the producer doesn’t seem to be in a hurry to sell them the cattle to slaughter. This is even with the packer continuously slowing the slaughter. What do you make of this situation and will it persist into the summer? We’ll see!... If price trades below the rising 8-DMA, it could test support at 200.90. Support then comes in at 199.10. If price can hold settlement, it could test resistance at 203.50. Resistance then comes in at 205.55.
Boxed beef cutouts were mixed as choice cutouts decreased 2.61 to 325.45 and select increased 0.26 to 309.62. The choice/ select spread narrowed and is at 15.83 and the load count was 124.
Friday’s estimated slaughter is 100,000, which is above last week’s 99,000 and below last year’s 108,782. Saturday slaughter is expected to be 20,000, which is above last week’s 2,000 and last year’s 13,257. The estimated slaughter for the week (so far) is 560,000, which is below last week’s 584,000 and last year’s 592,712.
The USDA report LM_Ct131 states: So far for Friday negotiated cash trade has been active on very good demand in all trading regions. Compared to last week in the Southern Plains live FOB purchases traded 7.00-8.00 higher at 210.00. Compared to last week in Nebraska and the Western Cornbelt, live FOB purchases traded 6.00-9.00 higher from 212.00-215.00 and dressed delivered purchases traded 10.00 higher at 335.00.
The USDA is indicating cash trades for live cattle from 202.00 – 215.00 and from 330.00 - 340.00 on a dressed basis (so far).
United States Cattle on Feed Down 2 Percent
Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.6 million head on March 1, 2025. The inventory was 2 percent below March 1, 2024.
Placements in feedlots during February totaled 1.55 million head, 18 percent below 2024. Net placements were 1.49 million head. During February, placements of cattle and calves weighing less than 600 pounds were 295,000 head, 600-699 pounds were 275,000 head, 700-799 pounds were 415,000 head, 800-899 pounds were 389,000 head, 900-999 pounds were 130,000 head, and 1,000 pounds and greater were 50,000 head.
Marketings of fed cattle during February totaled 1.63 million head, 9 percent below 2024.
Other disappearance totaled 60,000 head during February, 7 percent above 2024.
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Ben DiCostanzo
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Walsh Trading, Inc.
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