Livestock Analysis | Cattle score solid end-of-week gains

June 27, 2025

Livestock Analysis
Livestock Analysis | June 27, 2025
(Pro Farmer)

Hogs

Price action: August lean hog futures closed 2.5 cents higher at $110.275 and closed on session highs. That marked a $2.17 loss on the week.

5-day outlook: Lean hog futures favored the downside most of today but eventually eked out a modest gain following yesterday’s moderately bearish Hogs & Pigs Report, though saw little sustained selling pressure throughout today’s session. USDA Reported the hog herd was up 0.3% from year-ago as of June 1 weighed on the hog market today. Both pork cutout and the CME lean hog index are at the highest level in nearly three years despite a relatively larger hog herd. That is a testament to the robust demand for pork as noted in the longer-term outlook below. While that demand has helped support futures over the past couple months, yesterday’s report had a rather immediate impact on the cash market. The CME lean hog index is up another 48 cents to $111.89 as of June 25. The preliminary calculation puts the index up another 13 cents to $112.02 for Monday’s quote, though indicates strength in the cash market could be stalling. Technical strength should help push prices higher over the next week, as today’s selling pressure looks to have little effect on the near-term chart, and even helped correct some overbought conditions.

30-day outlook: Yesterday’s H&P Report could have some lasting ramifications on the market. One can immediately point to the CME lean hog index to say the market was slightly caught off guard. How prices react over the course next week will be key. One sign that strength will continue is resurgent strength in pork cutout. After seeing consolidation for much of this week, cutout surged $4.21 to $123.86 at midsession today. Gains were seen in all cuts except picnics, with a $12.87 surge in bellies leading the market higher. Persistent strength in cutout could continue to lend strength to the cash hog market.

90-day outlook: Pork production is nearing annual lows, which has boosted cutout values and cash hog prices as packers are vying for supplies. The upcoming bounce in production and potential summer lull in demand is likely to weigh on prices in the latter portion of the forecast window. Cattle prices appear to have hit a near-term peak as well. It will be difficult for hog futures to work higher amid bearish cattle prices. Demand will continue to garner most of the market’s attention.

What to do: Get current with feed coverage.

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

Feed needs: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.

Cattle

Price action: August live cattle futures rallied $4.10 at $213.30 and near the daily high. On the week, August cattle rose $3.475. August feeder cattle futures gained $4.60 to $307.90 and near the session high. For the week, August feeders were up $5.45.

5-day outlook: Today’s technically bullish weekly high closes in August live and feeder cattle futures markets set the stage for follow-through, chart-based buying from the speculators early next week. We’ve been pointing out for quite some time now that just when many traders are reckoning the cattle futures markets’ bull runs are finally over, the bulls come storming back.

The noon report today showed higher wholesale boxed beef cutout values. Choice-grade rose $1.14 to $396.19 and Select grade was up $2.52 at $382.26. Movement at midday was 61 loads. The Choice-Select spread is presently $13.92. Beef cutting margins have risen and are now estimated to be in the black, according to Hedgersedge, due to recent weakness in cash cattle prices and strength in cutout values. Cash cattle trade got underway in earnest late Thursday. USDA today reported active cash cattle trading so far this week is seeing steers average $227.91 and heifers average $225.72. Last week’s USDA-reported cash cattle average trading price was $234.88.

30-day outlook: Live cattle futures continue to trade at hefty discounts to the cash cattle market, suggesting the downside will be limited in futures markets in the coming weeks. Strong grocer and retail demand has been supportive to the cattle and beef markets recently. Beef packers have moved high volumes of wholesale beef. USDA’s latest Cattle on Feed Report continues to suggest a bullish supply-side picture, which should also keep a floor under the cattle markets in the near-term.

90-day outlook: The abrupt cessation of the Iran-Israel war following a major escalation with U.S. bombing of Iranian nuclear sites quickly put keener risk appetite back into the general marketplace, pushing major U.S. stock indexes to record highs this week. If the Middle East tensions remain de-escalated in the coming few months, U.S. consumer confidence levels will uptick, meaning likely better consumer demand for beef at the meat counter. This would be important as the outdoor grilling season is now peaking and will soon wane. Also, June consumer confidence readings from the Conference Board surprisingly downticked by a significant amount. Upbeat consumer attitudes and a solid U.S. stock market should keep Americans stepping up to the meat counter and buying more beef.

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: For soymeal, you have full coverage in cash through July, with half of your needs for August, September, October, November and December covered in cash. For corn, you have all needs through August covered in the cash market, with half of your needs for September and October covered in cash.