Hogs
Price action: August lean hog futures rose $1.70 to $96.75, near the daily high and for the week up $2.175.
5-day outlook: The lean hog futures market posted a strong rebound today after moderate price pressure on Wednesday, to produce a technically bullish weekly high close today that keeps the chart-based bulls energized heading into trading next week. Bulls are keeping alive a fledgling price uptrend on the daily bar chart. High heat and humidity across the Midwest this weekend will continue to stress livestock.
The USDA noon pork showed cutout value was up $0.53 at $96.24, led by gains in hams and picnics. Movement at midday was 132.27 loads. The latest CME lean hog index is up 24 cents to $91.48. Monday’s projected CME index price is up 18 cents at $91.67. The national direct five-day rolling average cash hog price quote for today is $96.98.
30-day outlook: August lean hog futures broke out of the recent range of consolidation as traders covered shorts as heat intensified across a large portion of the U.S. Meanwhile, cash and wholesale fundamentals remain directionless as ample supplies meet demand. Hog slaughter and pork production are steady to slightly lower than year-ago, though heavier carcass weights have kept the pipeline well-supplied. Sharp price swings in primal bellies, fueled by improving bacon demand and rising cold storage stocks, have been the main driver of recent cutout movements.
90-day outlook: Potential for higher-for-longer beef prices at the meat counter could result in better consumer demand for beef into 2027. But unlike cattle, hogs are in a gradual supply growth and productivity-driven expansion, helping to keep hog futures under pressure.
What to do: Get current with feed coverage.
Hedgers: You have 50% of Q2 production hedged with all remaining risk in the cash market.
Feed needs: You have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.
Cattle
Price action: August live cattle futures fell $2.60 to $239.225, near the session low, hit a three-week low and for the week down $6.60. August feeder cattle futures lost $3.525 to $360.625, near the daily low and for the week down $9.225.
5-day outlook: The cattle futures markets bulls faded badly this holiday-shortened trading week, including technically bearish weekly low closes today, which set the stage for follow-through chart-based selling pressure early next week. Lower cash trade so far this week also pressured futures prices.
Cash cattle trading turned moderately active as of midday today, with USDA reporting steers averaging $255.25 and heifers $255.35. That compares to last week’s USDA-reported cash cattle trading average of $259.34. The noon report today showed lower boxed beef prices, with Choice grade down $3.61 at $387.65 and Select grade down $0.49 at $369.20. Movement at midday was 61 loads. The Choice-Select spread is presently plus $18.45.
30-day outlook: Cattle futures have faced long liquidation of late, with both live and feeder cattle futures each facing near-term technical trouble. The persistent New World screwworm threat and recent heat have offered little support. A pullback in boxed beef values has worsened already severely negative packer margins, which will continue to result in lower capacity utilization and reduced slaughter totals. Many retailers are heading into the Fourth of July with light inventories to efficiently meet consumer demand. Expect supply tightness to persist, with short-term downside risk from technical selling.
90-day outlook: Boxed beef values slid late this week, flying in the face of a CNBC feature that said beef prices are rising, along with consumer demand. It could be that the supply-bullish aspect of New World screwworm has been baked into futures prices, with the possibility that in the coming weeks growing cases in the U.S. (31 as of today) could at some point negatively impact consumer psychology, especially after peak grilling season winds down in August.
What to do: You have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make additional purchases.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You have corn-for-feed and soymeal needs covered through July in the cash market. Be prepared to make purchases if value prices continue.