For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, February 04, 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
April Lean Hogs gap opened lower and made the session low at 89.775. The breakdown to the low approached support at the rising 8-DMA now at 89.50 as tariffs were the talk of the day for Hogs. In the early part of the day, it was announced the President will impose tariffs on both Canada and Mexico of 25%, starting on February 1st which resulted in the weak open. The rumor mill then came alive and talk that the tariffs will be delayed until March took price up to the high at 92.05. The President denied the rumors and Hogs broke down again and settled near the low at 90.35. The rally stalled below resistance at 92.375 and settlement was below support at 90.40. It formed an Inverted Hammer candlestick which could indicate hammering out a low if the market could rally to start next week. That would mean that some sort of agreement on the President’s demands for the border were met over the weekend and he pulls the tariffs. Cutouts and the cash market continue to strengthen and if he pulls the tariffs, could help propel Hogs higher. Our exports, especially to Mexico could be muffled if he keeps the tariffs going and could eventually lead to more pressure on Hogs. All it would take for the tariffs to be lifted, in my opinion is some support at the border for keeping drugs and illegals from coming in to America. I don’t get why Mexico and Canada are balking at this. We’ll see!… A breakdown from settlement could see price test support at the rising 8-DMA and then 88.325. Support then comes in at the rising 13-DMA now at 87.65. Support is nearby at 87.10. A rally past resistance at 90.40 could see price move towards resistance at 92.375.
The Pork Cutout Index increased and is 92.77 as of 01/30/2025.
The Lean Hog Index increased and is at 83.06 as of 01/29/2025.
Estimated Slaughter for Friday is 485,000, which is even with last week and below last year’s 490,009. Saturday slaughter is expected to be 156,000, which is below last week’s 186,000 and last year’s 257,832. The estimated total for the week (so far) is 2,574,000, which is above last week’s 2,477,000 and below last year’s 2,702,152.
March Feeder Cattle had a strong open. It opened higher, made an early high and then crashed to the low at 272.50. This took price to the rising 13-DMA which was right at 272.50 at the time. Price quickly reversed course and it rallied to the high at 277.15. This took price to just below resistance at 277.25 and it pulled back and then recovered to settle at 275.725. It was an interesting day for Feeders as I think the tariffs and Cattle inventory report due out after the close caused a volatile day in the Feeders. Feeders are still operating under the umbrella of the Bearish Engulfing candle pattern set up on January 29th. The engulfing candle occurred at the all-time high futures price and Bearish Engulfing candles at all-time highs could lead to a bigger decline if we can break down below the rising 13-DMA. Today’s rally took price back into the middle of the engulfing candle’s range which if you are bearish cattle is a good place to make a trade, in my opinion. A breakdown from settlement could see price retest support at 274.65. Support then comes in at 273.675. The rising 13-DMA is next at 272.70. If futures can overcome resistance at 277.25, we could see a test of resistance at 279.20. The all-time high is next at 279.825. A trade above here negates the Bearish Engulfing candle. We’ll see!…
The Feeder Cattle Index increased and is at 281.07 as of 01/29/2025. Friday’s results have not been released as I write this article.
April Live Cattle opened higher and made the session high at 203.00. It stopped just above the rising 8-DMA now at 202.95 and then collapsed. It broke down to the session low at 200.65, testing support at 200.90 and the rising 13-DMA now at 200.80 and it then recovered to settle at 202.30. Cash continued to trade within last week’s trading range and could settle at another all-time high average price as the South looked like it had a higher trade and average price. This is a positive for futures but we are coming into a period where we normally see a decline in the cutout and beef demand which could limit the enthusiasm for cattle. Packers normally cut back on slaughter during this period and cash prices could slip in the near term. The two day and part of Friday breakdown saw some retracement as traders waited for the Cattle Inventory report which came out after the close. The results are shown below. Futures retraced just over seven handles since making its all-time high for the lead contract based on volume at 200.725. Monday will see traders react to the Cattle Inventory report and what ramifications the tariffs may have on the cattle industry if they are still in place after the weekend. We’ll see!… If price can’t hold settlement, it could re-test support at 200.90 and the rising 13-DMA. Support then comes in at 199.10 and then the rising 21-DMA now at 198.925. If price can overcome the rising 8-DMA, we could see price test resistance at 203.50. Resistance then comes in at 205.50.
Boxed beef cutouts were higher as choice cutouts increased 0.20 to 327.68 and select increased 1.17 to 317.07. The choice/ select spread narrowed and is at 10.61 and the load count was 90.
Friday’s estimated slaughter is 114,000, which is above last week’s 111,000 and below last year’s 119,862. Saturday slaughter is expected to be 2,000, which is even with last week and below last year’s 11,862. The estimated total for the week(so far) is 600,000, which is above last week’s 599,000 and below last year’s 632,438.
The USDA report LM_Ct131 states: So far for Friday, negotiated cash trading has been at a standstill in the Texas Panhandle and slow on moderate demand in Kansas. The last established market in the Southern Plains was Thursday with live FOB purchases at 208.00. In Nebraska negotiated cash trade was slow on moderate demand. Compared to Thursday, a few live FOB purchases traded steady at 210.00. Not enough dressed delivered purchases for a market trend. The last established dressed delivered market was Thursday at 330.00. In the Western Cornbelt, cash trade has been slow on moderate demand. Not enough purchases for a full market trend. Last week live FOB purchases traded from 210.00-212.00 and dressed delivered purchases traded at 330.00.
The USDA is indicating cash trades for live cattle from 202.00 – 212.00 and from 325.00 – 332.00 on a dressed basis (so far).
January 1 Cattle Inventory Down 1 Percent
All cattle and calves in the United States as of January 1, 2025 totaled 86.7 million head, 1 percent below the 87.2 million head on January 1, 2024.
All cows and heifers that have calved, at 37.2 million head, were slightly below the 37.4 million head on January 1, 2024. Beef cows, at 27.9 million head, were down 1 percent from a year ago. Milk cows, at 9.35 million head, were up slightly from the previous year.
All heifers 500 pounds and over as of January 1, 2025 totaled 18.2 million head, 1 percent below the 18.3 million head on January 1, 2024. Beef replacement heifers, at 4.67 million head, were down 1 percent from a year ago. Milk replacement heifers, at 3.91 million head, were down 1 percent from the previous year. Other heifers, at 9.59 million head, were 1 percent below a year earlier.
Steers weighing 500 pounds and over as of January 1, 2025 totaled 15.8 million head, down 1 percent from January 1, 2024.
Bulls weighing 500 pounds and over as of January 1, 2025 totaled 2.01 million head, down 1 percent from January 1, 2024.
Calves under 500 pounds as of January 1, 2025 totaled 13.5 million head, down slightly from January 1, 2024.
Cattle and calves on feed for the slaughter market in the United States for all feedlots totaled 14.3 million head on January 1, 2025. The inventory is down 1 percent from the January 1, 2024 total of 14.4 million head. Cattle on feed in feedlots with capacity of 1,000 or more head accounted for 82.7 percent of the total cattle on feed on January 1, 2025, up slightly from the previous year. The combined total of calves under 500 pounds and other heifers and steers over 500 pounds (outside of feedlots), at 24.6 million head, was slightly below January 1, 2024.
Calf Crop Down Slightly
The 2024 calf crop in the United States was estimated at 33.5 million head, down slightly from the previous year’s calf crop. Calves born during the first half of 2024 were estimated at 24.6 million head, down slightly from the first half of 2023. Calves born during the second half of 2024 were estimated at 8.93 million head, 27 percent of the total 2024 calf crop.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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