By John Simpson – January 30, 2025
In my opinion, the livestock markets continue to show strong performance, particularly in the cattle sector. With record-high cash cattle prices, ongoing supply constraints, and robust consumer demand, the outlook remains bullish for live cattle and feeder cattle futures.
Cattle Market: Bullish Momentum Continues
In my opinion, the April live cattle futures remain in a strong uptrend, supported by tight supply and strong demand fundamentals. My current price target for April live cattle is $210.00-$215.00. With the U.S. cattle herd at its smallest size since 1951, the supply shortage continues to drive higher prices. Additionally, frozen beef stocks remain well below the five-year average, further tightening the market.
March feeder cattle futures are also maintaining their upward trajectory, and in my opinion, the continued supply constraints in the feeder market will support further gains. My price target for March feeders is $280.00-$285.00, as the lack of available feeder cattle and the persistent demand from packers keep prices elevated.
This continued strength aligns with my previous analysis from The Sinclair Report: Record Cash Cattle Prices Drive Market Higher (January 10, 2025) and The Sinclair Report: Cattle Futures Rally (January 24, 2025), where I highlighted the impact of the smallest U.S. cattle herd since 1951 and increasing consumer demand supporting the bullish outlook for live and feeder cattle.
Hog Market: Volatility Persists
While the cattle market remains in an uptrend, in my opinion, the hog market continues to experience significant volatility. April hog futures have been trading in a choppy pattern, driven by fluctuating export demand and the impact of a strong U.S. dollar on pork exports. However, I believe the market still has the potential for a move higher, with my target for April hogs set at $95.00.
My view is consistent with previous discussions in The Sinclair Report: Dollars Impact on Rising Prices (January 23, 2025), where I noted how a strong U.S. dollar could limit export demand and add to volatility in the hog market.
Latest COT Report Insights
According to the latest Commitments of Traders (COT) report released by the CFTC on January 24, 2025, commercial traders in the live cattle futures market are maintaining net short positions, while non-commercial traders (speculators) are holding net long positions. In my opinion, this data reinforces the continued bullish sentiment in the market, as speculators are anticipating further price gains. Meanwhile, commercial hedgers are managing risk, which suggests they expect potential market volatility.
Additional Considerations
In my opinion, another key factor to watch in the livestock markets is the ongoing impact of grain prices on feeder cattle costs. As highlighted in The Sinclair Report: Grain Market Outlook – January 23rd, 2025, the grain markets have remained volatile, with soybean meal prices rising due to increased global demand. This increase in feed costs may have long-term implications for feeder cattle prices and overall production costs in the livestock industry.
Furthermore, weather disruptions continue to impact grazing conditions. As previously discussed in The Sinclair Report: Cattle Futures Rally, cold temperatures in key cattle-producing states have limited grazing, further tightening supply. This trend should be closely monitored in the coming weeks as it may further support higher cattle prices.
Final Thoughts
In my opinion, the livestock markets continue to present strong opportunities for traders. With live cattle and feeder cattle maintaining their uptrends and hogs experiencing ongoing volatility, these markets require close attention to supply and demand fundamentals. Additionally, factors such as grain prices and weather-related disruptions could play a significant role in shaping the market’s future direction. As always, market conditions can change rapidly, so risk management remains critical.
As always, this is just my opinion and should not be considered as financial advice. Market conditions can change rapidly, and it’s essential to stay informed and manage risk accordingly.
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John S. Simpson Jr.
Senior Market Strategist – Walsh Trading
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