Cattle Markets Surge, Hogs Make a Comeback
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August Lean Hogs gap opened lower and traded down to the session low at 108.25. The early breakdown took price below support at the rising 21-DMA now at 108.60 and it stalled just above support at 107.925. Price rebounded and then gathered steam as the morning cutout was surprisingly strong. This took price to the high at 110.50. It drifted the rest of the session and settled at 110.275. The recovery in Hogs saw price get back above resistance at 109.85 and then stalling just below the rising 13-DMA now at 110.725. The early pressure came on the heels of a mildly bearish Hogs and pigs report, released after the close on Thursday. The one-day cutout however, surged and emboldened bullish traders to take price to the highs, in my opinion. The breakdown was a new low for the down move but the rally was a reversal which took price up to the previous lows. This could help bulls, but the reason the market recovered, a strong morning cutout was reversed with the afternoon cutout that negated the entire weeks gains in the cutout. The morning cutout was up over 4 bucks to 123.86 with a strong load count and the afternoon saw the cutout drop over to bucks from the previous day. It was a 6-buck drop from the morning cutout to 117.46 with a strong load count. The Belly took a beating after a strong morning showing. The cutout index on Monday should see a decline. Monday is month end and quarter end. This may impact Hogs. We’ll see!... If Hogs can get above the 13-DMA, it could challenge resistance at the declining 8-DMA now at 111.425. Resistance then comes in at 111.675. A failure from settlement could see price re-test support at the rising 21-DMA. Support then comes in at 107.925.
The Pork Cutout Index increased and is at 121.68 as of 06/26/2025.
The Lean Hog Index increased and is at 111.89 as of 06/25/2025.
Estimated Slaughter for Friday is 463,000, which is above last week’s 453,000 and below last year’s 468,923.
Saturday slaughter is expected to be 58,000, which is above last week’s 15,000 and below last year’s 64,873. The estimated total for the week (so far) is 2,408,000, which is above last week’s 2,357,000 and below last year’s 2,417,344.
August Feeder Cattle opened higher and traded down to the low at 303.125. The dip in price tested support at the declining 8-DMA now at 303.425. It reversed course and rallied the rest of the session to the high at 308.125. It settled near the high at 307.90. The rally took price past resistance at 306.90 and 307.675. The Feeder Index had broken down after making a new all-time high at 317.10. The weakness in the index saw futures take price lower after having a small premium to the index to a decent discount to the index. The rally has narrowed the discount considerably. With month end/ quarter end on Monday, traders after seeing futures drop over 14 handles took some profits after being unable to pressure futures below the psychological 300.00 level. It made its low at 300.05 on Tuesday and then spent the next 2 days drifting within that sessions candle. Not seeing follow through early on Friday and with the Live Cattle market also firm, saw covering and then get met out calls after price kept going up. The Feeder Cattle Index has stabilized and there is one more day left in June. We’ll see!... A breakdown from settlement could see price re-test support at 306.90. A failure could take price back down to support at the rising 8-DMA. Support then comes in at 301.90. If settlement holds, price could test resistance at 309.475. Resistance then comes in at 310.55.
The Feeder Cattle Index increased and is at 311.97 as of 06/26/2025.
August Live Cattle gap opened higher and traded to the low at 208.975. The low tested support at 208.80 and price quickly reversed course and rallied the rest of the session to the high at 213.675. It settled near the high at 213.30. The rally took price back above the 13 and 21-DMAs now at 212.60 and 212.90 respectively. It was a strong showing as traders finally realized that the August contract was trading at a steep discount to where the cash market was, even with last weeks and this week’s decline in cash prices. With the steep down move we saw with yesterday’s low the low for the move at 207.70 from the all-time high price for the lead contract at 220.05, short-covering was the name of the game. The covering led to panic in my opinion as with no pullback from the rally, traders bid it up to get out before the weekend. Packers kept slaughter low for the week yet again and with next week a short week, they were able to keep cash prices moving down in spite of the rally in futures. This is a change from when the market was going higher while futures prices lagged. Packers got some control again for now. The cutout made a new high again and cash prices weren’t able to take advantage of the continued strength in the cutout. This was a win week for the packer. Can the packer keep this up? The Fourth of July Holiday is on Friday and cutouts usually slide. Can the y keep a lid on cash prices from here? We’ll see!... If price can’t hold settlement, it could re-test support at the 13 and 21_DMAs. A failure from here could see price test support at the rising 50-DMA now at 211.15. Support is nearby at 210.975. If price can hold settlement, it could test resistance at 214.325. Resistance then comes in at 215.60.
Boxed beef cutouts were higher as choice cutouts increased 1.46 to 396.51 and select jumped 3.21 to 382.95. The choice/ select spread narrowed and is at 13.56 and the load count was 80.
Friday’s estimated slaughter is 105,000, which is below last week’s 108,000 and last year’s 119,148. Saturday slaughter is expected to be 3,000, which is above last week’s 1,000 and below last year’s 16,453. The estimated total for the week is 560,000, which is even with last week and below last year’s 610,420.
The USDA report LM_Ct131 states: Thus far Friday negotiated cash trade was light to moderate in the Western Cornbelt. Compared to last week, live purchases traded 3.00-6.00 lower from 230.00-233.00, mostly at 232.00. Dressed purchases compared to last week traded 6.00-8.00 lower from 368.00-370.00 on a light test. Trade was light on moderate demand in the Southern Plains and Nebraska, however not enough purchases for an adequate market test. The latest established market in the Texas Panhandle was on Thursday with live purchases from 223.00-225.00, most at 224.00. In Kansas on Thursday live purchases traded from 223.00-225.00, mostly at 225.00. In Nebraska on Thursday live purchases traded at 230.00 with dressed purchases at 368.00 with a few up to 373.50.
The USDA is indicating cash trades for live cattle from 222.00 – 233.50 and from 365.00 – 373.50 on a dressed basis (so far).
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Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
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