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August Lean Hogs gap opened higher and made the high of the day at 106.60. The market turned lower, closed the gap and broke down to the low at 105.575. It changed direction again and made its way towards the high and settled near the high at 106.475. The early high approached resistance at 106.85 and the breakdown to the low neared support at the 8 and 50-DMAs now at 105.35 and 105.325 respectively. The recovery in hogs took price back above the 13-DMA now at 106.00. The session formed a hanging man candlestick and is working on a flag pattern which could be a bearish indication for hogs, in my opinion. The hanging man candle comes at the top of the recent up move in the August contract. The cash market has stabilized and is grinding higher. August is now below the cash index. The cutout has fought back and is moving higher. Exports are weak. Slaughter should increase going forward as we move towards a seasonal increase in production. We are in the summer doldrums and the cash market has turned higher. We have the potential for trade deals that could ignite demand. We have the potential for trade deals to fall through and higher tariffs on our trading partners. This could soften demand. There is a lot of contradictory forces in place right now, in my opinion. The positive news is with all these forces in play; we have seen the cutout and cash market stabilize. This bodes well for bullish traders if the negative candle is neutralized on Monday. We’ll see!... If Hogs can hold settlement, it could test resistance at 106.85. Resistance then comes in at 107.925. A failure from the 50-DMA could see price test support at the 104.35. Support then comes in at 101.975.

The Pork Cutout Index increased and is at 114.52 as of 07/17/2025. 

The Lean Hog Index increased and is at 107.63 as of 07/16/2025.

Estimated Slaughter for Friday is 463,000, which is above last week’s 423,000 and last year’s 423,255. Saturday slaughter is expected to be 9,000, which is below last week’s 39,000 and last year’s 42,209. The estimated total for the week is 2,342,000, which is below last week’s 2,353,000 and last year’s 2,393,523.

August Feeder Cattle opened lower and traded up to the high at 325.90. The rally kept price in the upper end of its recent trading range, threatening to take out the recent all-time high at 326.875. Price reversed course as rumors of the New World Screwworm made its way into the market. This sent Feeders into a tailspin, taking price to the low at 321.00. The breakdown tested support at 321.00 and it held as traders calmed down after digesting the rumor. Little information has come out about the rumor other than a customer telling me he heard the screwworm was found in an Eagles beak?? Sketchy! The breakdown on the new is a knee-jerk reaction to  a negative news story. In my opinion, the result of an actual infestation would be bullish on top of the bullish supply situation already in place. If this situation progresses, we could see even lower cattle supply in the future, depending on the severity of the progression of the fly’s infestation and of our ability/ inability to mitigate its effects. The rumor aside, price continued its consolidation at all-time highs. Price is trading within the all-time high price of 326.875 and the recent low at 318.65, established on the same day it made the all-time high. The Feeder Index is working its way back to the all-time high (323.37) and futures are slightly over the index. There has been a reluctance to keep futures over the index as we have rallied to the recent all-time highs. For futures to continue running higher  we, in my opinion need to see the cash index take out its recent high. Traders are nervous up here as we are at lofty levels. Hence, the consolidation as traders wait for positive cash news. It is interesting the index isn’t surging as you keep seeing news reports of feeder weight cattle continuing to make new records at all weight classes. Who is selling cattle at lower prices to keep the index in check? And why? We’ll see!... A breakdown from settlement could see price re-test support at 321.00. Support then comes in at 319.45. If settlement holds, price could test resistance pivot resistance at 325.975. The all-time high is next at 326.875. R2 is at 328.40 and R3 is at 330.875. 

The Feeder Cattle Index ticked higher and is at 322.28 as of 07/17/2025. 

August Live Cattle opened higher, traded to an early low and then raced to another new all-time high for the lead contract at 224.55. The rumor mill took price lower to the low of the day at 222.125 and it bounced back, grinding higher to settle at 223.55. The opening breakdown came as producers told me the packer is trying the old, I bought enough cattle and I am out of the market routine. The rally to the all-time high came as the packer, not getting producers to lower prices, jumped back in the market at producer levels. Then the rumor and then the realization that the packer is still paying up to buy cattle took price back near the high. This is with the continuation of the packer reducing the kill to try to get a rebound in the cutout. So far, the tactic isn’t working as the cutout was lower than last week. Exports are weakening and the tariff potential is outweighing the potential for higher exports due to trade agreements. Even if we have an agreement with China, they still haven’t issued registrations for our processing facilities. Hence, no ability to export to China, even if there is an agreement in principle. It would take a waiver of the registration process or a wink and a turning of the head to get exports going in rapid fashion. If that doesn’t happen, it would take a month or more to get the facilities okayed. The packer knows supplies are tight and they are in a bind with no help in sight. Weights haven’t surged and the producer is current, in my opinion and the grading isn’t improving. This keeps the packer on their toes as they try to find ways to get back control of the market. So far, nothing is working. The load counts jumped on the break down in the cutout price and the packer may have to get even more aggressive as we go forward. They have more orders to fill than they have had in recent weeks. Their struggles should continue in my opinion. We’ll see!... A failure from settlement could see price test support at the rising 8-DMA now at 221.775. Support then comes in at 220.05. If price can hold settlement, it could test resistance at the all-time high. Resistance then comes in at pivot resistance at R2 at 225.75. R3 is at 226.95.

Boxed beef cutouts were mixed as choice cutouts increased 0.27 to 373.55 and select fell 2.35 to 351.49. The choice/ select spread widened and is at 22.06 and the load count was 103.

Friday’s estimated slaughter is 101,000, which is even with last week and above last year’s 100,856. Saturday slaughter is expected to be 4,000, which is above last week’s 3,000 and below last year’s 10,456. The estimated slaughter for the week (so far) is 563,000, which is below last week’s 568,000 and last year’s 589,374.

The USDA report LM_Ct131 states:  So far for Friday, negotiated cash trade has been mostly inactive in the Texas Panhandle and Kansas. The last established market in the Texas Panhandle was Thursday at 230.00. The last established market in Kansas was Thursday from 230.00-231.00. Negotiated cash trade has been light on moderate demand in Nebraska and the Western Cornbelt. In Nebraska, compared to Thursday, dressed purchases were mostly steady at 380.00 on a light test. The last established live market in Nebraska was Thursday with live purchases at mostly 240.00. In the Western Cornbelt, compared to Thursday, live purchases were steady at 240.00. The last established dressed market in the Weestern Cornbelt was Thursday at 380.00.

The USDA is indicating cash trades for live cattle from 225.00 – 242.50 and 373.00 – 382.00 on a dressed basis (so far).

**Call me for a free consultation for a marketing plan regarding your livestock needs.**

Ben DiCostanzo

Senior Livestock Analyst

Walsh Trading, Inc.

Direct: 312.957.4163

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