For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, February 18, 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 had a strong open as a jump in the Thursday cutout created early enthusiasm. The enthusiasm lasted all of 5 minutes as Hogs made its high at 94.325 during the session’s 1st 5 minutes of trade. The rally stalled below the Thursday high and despite another strong performance in the morning cutout, price made its way lower the rest of the session to the low at 92.325. It settled near the low at 92.60. The breakdown took price just below support at the rising 8-DMA now at 92.475 and the key level at 92.375 with settlement just above them. With a 3-day weekend approaching, traders looked to square some positions to reduce some risk in front of the President’s Day holiday. With the morning cutout higher with a fairly good load count for a Friday, cash continues to look promising. Slaughter levels were lower than last year yet again continuing to demonstrate the USDA may have over-estimated hogs supply in the last Quarterly Hogs and Pigs report. Demand is good for pork as seen by the continuing upwards progression of the cutout as grocers look to get ready for the Easter Holiday and consumers taking advantage of a cheaper pork price when compared to beef. With the cutout index approaching 100.00, the question will be whether pork is getting too expensive and lead to a drop-off in demand? We’ll see!… A breakdown from 92.375 could see price test support at the rising 13-DMA, now at 91.475. Support then comes in at 90.40. If price can hold settlement, it could re-test resistance at 93.50. The February 12th high is next at 94.75. A rally past here could see price test resistance at 95.30.
The Pork Cutout Index increased and is 99.19 as of 02/13/2025.
The Lean Hog Index increased and is at 88.06 as of 02/12/2025.
Estimated Slaughter for Friday is 484,000, which is even with last week and above last year’s 479,432. Saturday slaughter is expected to be 97,000, which is below last week’s 109,000 and last year’s 124,528. The estimated total for the week (so far) is 2,540,000, which is above last week’s 2,538,000 and below last year’s 2,549,726.
March Feeder Cattle opened higher and traded to the session high at 269.325. This was a test of resistance at the declining 13-DMA now at 269.175 and the key level at 269.00. With traders unable to take price higher, it fell back and raced to the session low at 265.925. It consolidated from here, settling near low at 266.35. The breakdown took price below the declining 8-DMA now at 266.90. The 8-DMA is below the 13-DMA indicating a short-term downtrend could be beginning. The cash market is ignoring the drop in futures as the index climbed with Friday’s result and producers are telling me cattle buyers are still very aggressive at the sale barns. Futures continue to trade at a discount to the index which could limit downside as futures could snap back towards the index to narrow the discount. A breakdown from settlement could see price retest support at the rising 50-DMA, which is at 264.975 and the nearby key level at 264.675. Support then comes in at 262.075. If settlement holds, we could re-test resistance at the declining 13-DMA and 269.00. Resistance then comes in at the 21-DMA now at 270.55. We’ll see!…
The Feeder Cattle Index jumped and is at 276.23 as of 02/13/2025.
April Live Cattle opened higher and traded to the session high at 197.05. It challenged resistance at the declining 8-DMA now at 197.025 and was quickly rejected, taking price below the key level at 196.625to an early low where it sat for the rest of the morning. It then crashed, trading down to the low at 194.00 with settlement near the low at 194.25. The breakdown took price below the 50-DMA, now at 194.90 and it stopped just above support at 193.95. The breakdown in futures sent live cash prices reeling this week as cash prices are below last week’s average price from 202.00 to 204.00, compared to last week’s average at 207.05. Cutouts have continued their seasonal decline and it looks like funds are getting serious with their long position liquidations. We are in a period of seasonal decline as the cutout price declines and the packer cuts back on slaughter as consumer demand normally declines this time of year. Producers gave back a big chunk of the recent price increases this week and the critical level at 200.00 looms. The packer will do all they can to get price back below this key psychological price next week after successfully backing up cash prices this week. More cutbacks in slaughter are expected going forward but producers tell me even with the cutbacks in slaughter the packer is taking cattle a lot sooner than they were just a short while ago. The battle continues! We’ll see!… If price can’t hold support at 193.95, a breakdown could lead to a test of support at 193.225 and then 192.70. Support then comes in at 192.05. If price can hold settlement, we could see price test resistance at the 50-DMA and then 196.625.
Boxed beef cutouts were lower as choice cutouts fell 2.70 to 314.70 and select dropped 2.70 to 307.14. The choice/ select spread remained at 7.56 and the load count was 87.
Friday’s estimated slaughter is 103,000, which is above last week’s 100,000 and below last year’s 120,134. Saturday slaughter is expected to be 4,000, which is below last week’s 8,000 and above last year’s 2,725. The estimated total for the week(so far) is 561,000, which is below last week’s 584,000 and last year’s 608,466.
The USDA report LM_Ct131 states: So far for Friday in the Texas Panhandle, negotiated cash trade has been mostly inactive on light demand. In Kansas, negotiated cash trade has been at a standstill. The last reported market in the Southern Plains was Tuesday with live FOB purchases at 203.00, on a light test. In Nebraska negotiated cash trade has been moderate on moderate demand. Compared to last week in Nebraska, live FOB purchases have traded 5.00 lower at 203.00 and dressed delivered purchases have traded 7.00-8.00 lower from 320.00-321.00. In the Western Cornbelt negotiated cash trade has been slow on moderate demand. Compared to Thursday in the Western Cornbelt, live FOB purchases have traded steady at 203.00. Last week dressed delivered purchases traded at 328.00.
The USDA is indicating cash trades for live cattle from 201.00 – 204.00 and from 315.00 – 322.00 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
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