Hogs
Price action: August lean hog futures fell $0.025 to $96.575, nearer the daily low and for the week down 15 cents.
5-day outlook: The lean hog futures market bulls this week stabilized the market and are keeping alive a fledgling price uptrend on the daily bar chart.
USDA’s quarterly Hogs & Pigs Report released Thursday afternoon leaned slightly price-friendly, showing the U.S. hog herd at 73.664 million head as of June 1, down 33,000 head, or 0.04%, from a year ago and 696,000 head less than the average pre-report guess. Market hog inventories rose 36,000 head, or 0.1%, while the breeding herd shrank 1.2% from a year ago. The spring pig crop was up 8,000 head, virtually flat, despite a 1% reduction in farrowings thanks to a 1% rise in pigs per litter to a record 11.87 head.
High heat and humidity across all of the Midwest this weekend and next week will stress livestock.
The USDA noon report showed pork cutout value was up $2.60 at $97.82, led by gains in butts and picnics. Movement at midday was decent at 185.12 loads. The latest CME lean hog index is down 7 cents to $91.78. Monday’s projected CME index price is down 23 cents at $91.55. The national direct five-day rolling average cash hog price quote for today is $97.47.
30-day outlook: Modest short covering surfaced recently in lean hog futures, though struggling wholesale and cash fundamentals and persistent technical pressure have kept momentum from building. Plentiful pork supplies also continue to limit buyer interest in lean hog futures. Unlike cattle, hogs are in a gradual supply growth and productivity-driven expansion, helping to keep hog futures under pressure.
90-day outlook: Reduced feed costs are likely to encourage herd expansion over time, placing an increased focus on both exports and domestic demand. Potential for higher-for-longer beef prices at the meat counter could result in better consumer demand for beef into 2027.
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 $1.40 to $245.825, near mid-range and for the week down 80 cents. August feeder cattle futures lost $3.45 to $369.825, nearer the daily low and for the week up $3.25.
5-day outlook: The cattle futures markets saw some profit-taking today, led by feeders. Technical traders also recognize there are now stiff chart resistance levels above the markets that could stop the rallies.
The USDA Animal and Plant Health and Inspection Service (APHIS) on its NWS website is now reporting 25 total New World screwworm detected cases in the U.S. and all still in Texas and New Mexico, with the newest five all in Texas. There are 23 active cases, all in Texas. So far, this news has favored the bullish cattle futures camp, due to supply concerns. However, the bulls are also worried that consumer psychology regarding buying beef at the meat counter could get dented because of the parasite.
High heat and humidity across all of the Midwest this weekend and next week will stress livestock.
Cash cattle trading was still very light as of midday today, with USDA reporting very light trading at $260.00. That compares to last week’s USDA-reported cash cattle trading average of $259.63. The noon report today showed lower boxed beef prices, with Choice grade down $4.22 at $392.10 and Select grade down $2.33 at $372.41. Movement at midday was decent at 74 loads. The Choice-Select spread is presently plus $19.69.
30-day outlook: Boxed beef values had surged recently, until today, with Choice edging above the $400.00 level for a time, which spurred slightly firmer cash sales in early week trade. Feeder futures continued to lead the charge with New World Screwworm at the forefront of the marketplace, though easing crude oil prices and increasing potential for a heatwave in the southern Plains have also leaned supportive. Beef processors remain focused on reducing slaughter volumes as margins remain under pressure, though feedlots will hold leverage in cash negotiations in the near term as fed supplies remain tight.
90-day outlook: The major U.S. stock indexes have wobbled after hitting record highs in early June. That could be a negative for consumer confidence. However, gasoline prices at the pump have dropped below $4.00 a gallon, on average, which will likely offset the negative implications of a slumping stock market. Significantly lower gasoline prices at the pump likely mean better demand for beef at the meat counter in the coming months.
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.