Livestock Markets Limp into the Weekend
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June Lean Hogs gap opened higher and ticked to the session high at 98.225 and then broke down to an early low where it reversed and retraced almost 61.8% of the range for the early morning trade. The market then turned lower and traded to the session low at 95.625. It settled near the low at 95.775. The gap open higher was an aggressive response to the Quarterly Hogs and Pigs report, taking price near the previous highs and resistance before capitulating and trading back down to the lower end of the trading band. The price action remains stuck within its trading range from 98.625 to the low at 94.20. It once again failed to hold onto its early move as traders seem to be willing to wait for next week’s tariff decisions from all the interested parties. April 2nd is tariff day and it could play an important role in the next directional move in the hog market. Canada and Mexico were two of the top players in last week’s export report and Brazil has been probing and attempting to take a more prominent role in the export mix. Aside from that little matter, we still have the grilling seasonal and the upcoming Easter holiday that could provide a spark for the hog market. With pork much lower than beef in price could we see a major increase in demand for pork? With the potential export issues in play, we would need to see the retail industry feature pork aggressively and get consumers to buy the much cheaper than beef protein product. We’ll see!... A breakdown from settlement could see price re-test support at 95.30. A breakdown from here could see price test support at 93.50. If price can hold settlement, it could re-test resistance at 97.30. Resistance then comes in at 98.475.
The Pork Cutout Index decreased and is at 96.52 as of 03/27/2025.
The Lean Hog Index was unchanged and is at 89.13 as of 03/26/2025.
Estimated Slaughter for Friday is 471,000, which is above last week’s 466,000 and last year’s 439,617. Saturday slaughter is expected to be 70,000, which is below last week’s 158,000 and above last year’s 15,847. The estimated total for the week is 2,480,000, which is above last week’s 2,422,000 and last year’s 2,393746.
May Feeder Cattle opened lower and rallied to the session high at 287.175. This took price to just above resistance at 286.55 briefly and then it pulled back and traded to the session low at 284.25 by late morning. It consolidated near the low and settled at 285.175. The breakdown pressured support at the rising 13-DMA now at 284.60 and it was able to hold with settlement just above it. This could key the price action on Monday as price has been trading below it and coming back to settle above it. The other short-term moving average… the 8-DMA has been hamstringing the upside over the past three days. It is rising and is at 286.00. The index has been moving up and down in a tight range around 287.00 since making its newest all-time high at 287.78 on March 21st. With the high sales prices in many areas, it is a little surprising to see the index in this range. We’ll see!... A breakdown from the 13-DMA could see price test support at 282.35. Support then comes in at the rising 21-DMA now at 281.05. If settlement holds, we could re-test resistance at the 8-DMA and 286.55. Resistance then comes in at 288.00.
The Feeder Cattle Index decreased and is at 286.76 as of 03/27/2025.
June Live Cattle opened lower and traded to the low at 204.475. Traders reversed price higher and took it to the session high at 206.35. This topped Thursdays 206.225 high and resistance at 205.55. Traders couldn’t maintain the enthusiasm and price broke down and neared the session low. It drifted the rest of the session and settled near the low at 204.85. With the lead contract under the all-time high for the lead contract (207.725), traders seem nervous that the high won’t be overtaken. They are hoping the cash market will take the lead and soar giving futures the incentive to go higher. The cash market was mostly in a steady with last week range and that disappointed traders in my opinion. They just let futures drift in the upper end of Thursday’s range, willing to wait until next week’s cash decision to move price. With the cash market unable to take cash to higher levels this week, there is worry that a top could be in place. Exports were at a marketing year low and with cutouts at high levels this could continue to fester. Cattle supplies are tight, but there are worries the packer will do something to change the focus from the tight supplies. What that could be, no one knows but there is always that angst out there especially since they are supposedly getting crushed with their margin. Beef prices are high and many are worried about the consumer and whether they can continue to keep demand for beef high. We do have seasonals coming into play, with the retail industry getting ready for grilling season. Will they continue to feature beef at the expense of pork or will they cave and continue to lift prices to all-time highs? The consumer has been doing a good job of consuming beef so far this year. But the stock market has been hit and trade tensions are percolating causing a drop in consumer confidence. Will this lead to them eating more beef to make themselves feel better or will it drive them to cheaper alternatives? We’ll see!... If price trades below the low, it could test support at the rising 8-DMA now at 203.725. Support is next at 203.50 and the rising 13-DMA is nearby at 202.975. If price can take out the Friday high, it could approach resistance at the all-time high at 207.725 for the lead contract.
Boxed beef cutouts were lower as choice cutouts fell 2.90 to 332.82 and select decreased 0.76 to 318.68. The choice/ select spread narrowed and is at 14.14 and the load count was 133.
Friday’s estimated slaughter is 107,000, which is above last week’s 100,000 and last year’s 96,918. Saturday slaughter is expected to be 17,000, which is below last week’s 20,000 and above last year’s 5,055. The estimated slaughter for the week (so far) is 609,000, which is above last week’s 560,000 and last year’s 582,209.
The USDA report LM_Ct131 states: So far for Friday in the Texas Panhandle, negotiated cash trade has been mostly inactive on light demand. In Kansas and the Western Cornbelt, negotiated cash trade has been light on moderate demand. A few live FOB purchases in Kansas traded at 209.00. Last week in the Southern Plains live FOB purchases traded at 210.00. Last week in the Western Cornbelt, live FOB purchases traded from 212.00-215.00 and dressed delivered purchases traded at 335.00. Negotiated cash trade in Nebraska has been light on moderate to good demand. Compared to last week, on a light test, dressed delivered purchases traded steady to 10.00 higher from 335.00-345.00. A few live FOB purchases traded at 213, however, not enough for a full market trend. Last week in Nebraska, live FOB purchases traded from 212.00-215.00.
The USDA is indicating cash trades for live cattle from 206.00 – 214.00 and from 330.00 - 345.00 on a dressed basis (so far).
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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