Livestock Analysis | Cattle notch another week of strong gains

May 2, 2025

Livestock Analysis
Livestock Analysis | May 2, 2025
(Pro Farmer)

Hogs

Price action: June lean hog futures closed $1.175 higher at $99.35, though still marked a $1.80 loss on the week.

5-day outlook: Lean hog futures broke higher mid-morning after consolidating the past couple of sessions, driven by resurgent strength in pork cutout. While this morning it looked to be another sideways session caught between moving average support and resistance, reports that cutout rose $2.96 in morning trade to $99.42 helped lift prices. Strength in butts and loins lifted cutout. Not only were prices strong, but movement totaled 260.01 loads this morning, surpassing yesterday’s total for the whole day. If strength were to persist next week and push the cutout above the $100.00 mark, which has been a hard ceiling over the past couple of months, it would likely shift sentiment among traders and have traders targeting resistance at $102.00.

30-day outlook: The CME lean hog index continues to work modestly higher but gains have stalled in recent days. The CME lean hog index is up another 33 cents to $89.57 as of April 30, the 11th consecutive daily gain, but also the smallest daily rise in a week. The preliminary calculation puts the index up another 12 cents to $89.71 on Monday, once again showcasing the stabilizing index. The relative flat price action in pork cutout is likely weighing on the cash market. Most years see strength this time of year in anticipation of summer grilling demand and slowing slaughter counts. This year that has not been the case and considering the trade outlook mentioned below, traders are likely hesitant to build steep premiums into the market over the summer months.

90-day outlook: Trade deals have been slow to develop, which has weighed on hog futures since tariff talks really ramped up in February. The anticipation of pork exports being highly hindered has weighed on cutout as well, which has struggled to see seasonal gains over the past several weeks. If trade deals were to be made with agricultural products as a focus, which has been mentioned in meetings with several countries, it would be supportive for hog futures in the long-term, but the longer U.S. pork is priced out of the world market, the more unpredictable the long-term ramifications are.

What to do: Get current with feed coverage.

Hedgers: You are carrying all production risk in the cash market.

Feed needs: You should have all corn-for-feed needs covered in the cash market through May. You also have all soymeal needs covered in the cash market through May.

Cattle

Price action: June live cattle futures rose $1.45 to $211.10, nearer the daily high and hit a contract high. For the week, June cattle rose $2.85. August feeder cattle futures gained $2.45 to $296.90 and hit a contract high. On the week, August feeders gained $2.60.

5-day forecast: Still-solid cash cattle and beef market fundamentals are fueling the record-setting bull runs. Cash cattle trading picked up late this week, with steers and heifers trading right around $220.99, according to USDA. That’s well above last week’s record-high average cash cattle trading price of $216.32. While packer cutting margins remain deep in the red amid lighter cattle slaughter levels, packers are also thought to be short-bought on needs. The noon report today showed wholesale boxed beef values mixed, with Choice grade down 23 cents to $342.94, while Select rose $1.36 to $325.64. The Choice-Select spread is presently $17.30. Movement at midday was 61 loads. While the bull markets in live and feeder cattle futures are long-in-the-tooth, veteran traders know that stepping in front of a steaming locomotive and trying to pick market tops is a fool’s errand. Charts remain bullish for live cattle futures, which also suggests next week will see higher prices.

30-day outlook: With supply and demand fundamentals remaining strong in the cattle and beef markets, we look for prices in both to remain elevated in the coming weeks. Consumer demand for beef is likely to increase as the outdoor grilling season is just beginning. Choice-grade boxed beef values are the second-highest levels ever, behind the 2020 values. On the supply side, cattle slaughter levels are pacing well behind year‑ago levels as cattle numbers in feedlots remain historically low.

90-day outlook: Today’s U.S. employment situation report for April came in surprisingly upbeat, after many forecasters thought the report would show weakness due to the heightened global trade tensions and recent new tariffs. Today’s jobs data contradicted early-week U.S. economic reports that were starting to show some weakness. The U.S. stock indexes today rallied to multi-week high on the better jobs report. Key for the cattle and beef markets will be if the stock market can remain buoyant. If so, consumer confidence will improve to also suggest better demand for beef at the meat counter. However, if the stock market starts to seriously wobble again, consumers could be spooked and significantly curtail their purchases of pricier beef cuts at the grocery store.

What to do: Get current with feed coverage. Carry all production risk in the cash market for now.

Hedgers: Carry all production risk in the cash market for now.

Feed needs: You should have all corn-for-feed needs covered in the cash market through May. You also have all soymeal needs covered in the cash market through May.