Hogs
Price action: July lean hog futures surged to a fresh contract high today, ultimately closing 60 cents higher to $112.775. That marked a weekly gain of $3.30.
5-day outlook: Hog futures pushed to fresh contract highs today amid ongoing strength in cash fundamentals. Hog futures continue to exhibit remarkable strength as July futures eked out a contract high each day this week. Persistent strength in the face of highly overbought conditions point to how pessimistic traders were previously over the summer outlook. As cash fundamentals are trading at the highest mark in three years, futures are catching up. Recent strength is unlikely to give way any time soon given the seasonal points to strong fundamentals persisting over the coming month, though some profit-taking is possible given heavily overbought futures. The cattle market sinking to end the week is also somewhat of a bearish omen. A sustained downturn in cattle futures will be difficult to ignore, though that seems unlikely barring a significant fundamental shift.
30-day outlook: Gains in the CME lean hog index were unexpectedly strong this week. Yesterday, even though markets and gov’t offices were closed, the index marched another $1.25 higher to $107.59. The preliminary calculation puts the index up another $1.19 to $108.78 on Monday. Gains have not really slowed down since taking out the August 2023 highs a few days ago. Seasonals indicate the index could see sustained strength into the end of July, when pork production typically sees its annual low, and potentially even into August. As long as the index continues to push higher, a sustained turn lower in futures seems unlikely.
90-day outlook: Pork cutout pushed to fresh multi-year highs this week alongside cash hogs. Cutout consolidated somewhat mid-week before surging $2.46 higher to $186.90 today as all cuts except bellies posted gains. Summer grilling demand continues to underpin futures, though that will fade in the latter portion of the outlook. Late fall and winter futures are already trading well below the cash market. The long-term effect of tariffs on both inflation and the economy as a whole still remains to be known. Given record beef prices, consumers could be switched to pork rather than beef if things turn sour, which could limit seasonal weakness this fall. The market currently seems to be driven by demand and a shift in that dynamic seems unlikely at this time.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You have all of your soymeal and corn-for-feed needs covered in the cash market through July. You also have half of your soymeal needs for August, September and October covered in cash.
Cattle
Price action: August live cattle futures fell $1.85 to $209.825, near the session low and for the week down $2.625. August feeder cattle futures lost $1.725 to $302.45, near the daily low and on the week down $3.975.
5-day outlook: The cattle futures markets this week saw profit-taking from the speculators and some chart consolidation. Price action early next week will be impacted by this afternoon’s monthly USDA cattle-on-feed report. A Reuters poll showed analysts expected USDA to show the June 1 feedlot inventory down 1.1% from one year-ago at 11.456 million head. The important placements figure shows the average estimate indicating a 5.9% decline. Analysts expected May marketings down sharply, at a 9.3% reduction.
The cash cattle and beef markets are starting to show some chinks in their armor. Cash cattle trade has been relatively light so far this week, USDA today reported steers are fetching an average of $238.00, while heifers averaged $237.00. More active cash cattle trading may occur after this afternoon’s cattle-on-feed report. Last week’s average cash cattle trade was reported by USDA at $238.68. The noon report today showed wholesale boxed beef prices mixed, with Choice falling $3.44 to $390.35 and Select climbing $1.56 to $376.15. Select reached a new for-the-move high today, after Choice did the same Thursday. Movement at midday today was 64 loads. The Choice-Select spread is presently $14.20.
USDA reported net beef sales of 11,700 MT for 2025, down 24% from the previous week and 9% from the four-week average.
World Weather Inc. today said hot temperatures in the Plains states will stress livestock.
30-day outlook: Risk appetite in the general marketplace could play a significant role in cattle futures trading in the coming weeks. An escalation in the Israel-Iran war that draws the U.S. into the military action would likely be initially stock-market bearish, leading to eroding consumer confidence and potentially less consumer demand for beef at the meat counter.
90-day outlook: The present steep discounts that live cattle futures hold to the cash market suggests limited downside in futures in the near term. However, the around $30 discount October live cattle futures hold to the cash market is also indicative that cattle futures traders do not expect such presently elevated cash cattle prices in the months ahead. But cattle futures trading action so far this year has shown cattle bulls are very resilient after seeing selling pressure that many would have reckoned finally put in market tops in this record-setting bull run.
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 have all of your soymeal and corn-for-feed needs covered in the cash market through July. You also have half of your soymeal needs for August, September and October covered in cash.