For those interested I hold a weekly livestock webinar on Tuesdays, and my next webinar will be Tuesday, May 06, 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.
June Lean Hogs gap opened unchanged and broke down to the low at 98.625. It turned higher and rallied to the high at 100.30. It couldn’t sustain the rally and broke down to settle near the low at 99.00. The early breakdown tested support at 98.475 and the rally tested resistance at 100.075. Hogs are trading in a range from the low at 97.275 to the high of the range at 101.975. The Monday price action keeps price in the middle of the range as traders look for positive news in the cash market. The cash market has stabilized and we have seen the cutout index and the cash index rally off its lows despite the uncertain export market. The cutout looked like it had the potential to test the 100.00 level but it stalled on Monday after a nice jump in price on Friday, keeping the index steady any and likely disappointing bullish traders. The cash market seems comfortable with the cutout in the mid to upper 90’s and the cash index just below 90. The futures market wants to see cutouts break 100 and the cash index break 90, in my opinion. This could happen if we see exports pick up as trade deals take place. China seems to be coming to the table and Mexico was back buying pork from the US on the last report, indicating a reduction of tensions between the two countries. Consumer demand must be improving in the US with the reduction in our exports. If our exports pick up, we could see a breakthrough in the Hog market. We’ll see!… If Hogs can hold settlement, it could re-test resistance at 101.975. Resistance then comes in at 101.975. A failure from 98.475 could see price revisit support at 97.10. Support then comes in at the rising 21-DMA now at 96.725.
The Pork Cutout Index increased and is at 97.21 as of 05/02/2025.
The Lean Hog Index increased and is at 89.69 as of 05/01/2025.
Estimated Slaughter for Monday is 482,000, which is below last week’s 486,000 and last year’s 478,376.
August Feeder Cattle opened lower and broke down to the low at 295.95. The early pullback neared support at the rising 8-DMA now at 295.55 then rallied to the high at 299.175. It consolidated the rest of the session to settle near the high at 298.90. The rally took price to a new all-time high for the lead contract on the continuous chart, taking price above its recent trading range established around the previous high. We are so near the magical psychological 300.00 level in the futures and the Feeder index just pulled back on Monday after making a new all-time high for the index on Friday at 296.38. This could be a wall that is hard to break through with any lasting effects. We’ll see!… With a new all-time high established, we will look at pivot resistance numbers. The daily pivot R1 is at 300.10, R2 is at 301.25 and R3 is at 303.325. Weekly R3 is at 304.425. A breakdown from settlement could see price re-test support at the rising 8-DMA. Support then comes in at 293.80.
The Feeder Cattle Index fell and is at 293.40 as of 05/02/2025.
June Live Cattle opened lower at the low of the day at 211.00. The open tested support at 210.975 and it reversed course and rallied to the high 214.10. The high is a new all-time high for the lead contract on the continuous chart. It stalled and consolidated into the close to settle near the high at 213.65. The cash market surged at the end of last week to a new live cash high at 224.00. The high took place in the Northern area and the South was also making new highs at around 218.00 – 219.00. This powered futures on Monday in my opinion but futures are still trading at a steep discount to the cash market. This could be because the cutout has moved higher but has not surged to put money in the packer’s pockets, as they continue to say they are losing money and have been dropping slaughter levels to extreme lows during a time of prepping for strong seasonal consumer demand for beef. The pullback in slaughter has not seen a huge fall off in in beef production as we have been near last year’s levels due to record carcass weights. The positive for the packer and maybe the cutout, is last week’s production finally saw a big drop-off from last year’s production. This could force the retail industry to get aggressive and be willing to pay up for beef, helping the packer’s cause. This could also eventually back up supply enough for the packer to gain control of the cash market if they are able to continue to limit slaughter going forward. With the cash market continuing its upward trend to new all-time highs and the futures at a discount to the cash, any profit taking in the futures could pressure cash as prices may have over-reached in the short-run. We’ll see!… If price trades below settlement, it could re-test support at 210.975. If price can overcome the all-time high, pivot resistance comes into play. R1 is at 214.80, R2 is at 216.00 and R3 is at 217.90. Monthly R2 is at 222.95.
Boxed beef cutouts were higher as choice cutouts increased 0.67 to 343.57 and select jumped 2.72 to 328.07. The choice/ select spread narrowed and is at 15.50 and the load count was 81.
Monday’s estimated slaughter is 109,000, which is above last week’s 104,000 and below last year’s 117,796.
The USDA report LM_Ct131 states: Thus far Monday negotiated cash trade was mostly inactive on moderate demand in all feeding regions. Not enough purchases in any feeding region for an adequate market test. The latest established market was last week with live purchases in the Southern Plains at 218.00. Last week in Nebraska live purchases traded from 222.00-223.00 with dressed delivered purchases at 350.00 and few dressed FOB purchases at 352.00. Last week in the Western Cornbelt, live purchases traded from 220.00-224.00, mostly at 222.00 with dressed purchases at 350.00.
The USDA is indicating cash trades for live cattle at 220.50 and nothing on a dressed basis (so far)
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Ben DiCostanzo
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Walsh Trading, Inc.
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