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October Lean Hogs opened lower, traded to an early high and then broke down to the session low at 87.925. The breakdown took price below support at 88.325 and was a new low for the Hogs after breaking down from its previous trading range. The weakening cutout and a negative employment report sent prices lower. Traders were able to turn price higher after the low as cutouts came out strong in the morning report. It took price to the high of the day at 90.40 which establishes a new trading range from the breakdown candle high from July 29^th at 90.475 to today’s low. The rally took price back to the recent high and stalled right at resistance at 90.40, dipping at the end of the session and settling near the high at 90.05. Slaughter is running lower than expected as disease has reduced supply and the tariffs and expected tariffs have played havoc with our exports. Weights remain lower than last year, so production continues to lag behind last year. The erratic export scenario has pushed around the cutout as consumer demand in the states has been stable and potentially strong. Exports however, has to improve because it is an important part of the demand structure of our pork. It has been weak then strong, creating a choppy cutout. Supply is still expected to grow into the fall so pricing pressure expectations will continue, so exports must surprise to the upside to keep a positive take on the cutout and then cash prices. We’ll see!... If price can take out the July 29th high, we could see price test resistance at the July 24^th high at 91.975. A run to near the high puts us back into the larger trading range. The rising 200-DMA now at 92.35 is next. Resistance is nearby at 92.375. A failure from settlement could see price revisit support at 88.325. Support then comes in at 87.10.

The Pork Cutout Index decreased and is at 116.71 as of 07/31/2025. 

The Lean Hog Index down ticked and is at 110.37 as of 07/30/2025.

Estimated Slaughter for Friday is 470,000, which is above last week’s 437,000 and below last year’s 473,441. Saturday slaughter is expected to be 22,000, which is below last week’s 30,000 and last year’s 64,920. The estimated total for the week (so far) is 2,336,000, which is above last week’s 2,328,000 and below last year’s 2,442,879.

September Feeder Cattle opened higher, rallied to an early high and then broke down to the session low at 329.75. The breakdown tested support at the rising 13-DMA now at 330.65. The market then reversed course and rallied to the session high at 334.40. It pulled back a bit and then bounced back to settle near the high at 333.925. The movement back and forth today was the push of the strong cash markets and the weak employment number and resulting weak outside markets. The strong cash markets won out but was tempered by the weakness outside the cattle markets. Thursday’s month end profit taking put in a Bearish Engulfing candlestick formation which saw a brief follow-through to the downside. The weekly candle also put in a potentially bearish candle formation. We have 2/3rds of an Evening Star candlestick formation that will be considered bearish if it is completed next week with a down candle. With the daily chart already showing a bearish formation at all-time highs things could get interesting. Remember however, on this surge in price bearish formations have been negated almost routinely. So, next week will be in my opinion, an important week in the Feeder market. If Equity markets continue to lower this could put liquidation pressures on an exceedingly long market. We are also seeing the cash market ignore the futures breakdown as the index continued its trek higher making new all-time highs in the index. The index has climbed to a stunning 335.89 on Friday after the close. The recovery rally took price back over the rising 8-DMA now at 333.475. This could be important on Monday. We’ll see!... A breakdown from settlement could see price re-test support at the rising 8-DMA. Support then comes in at 332.075. Support then comes in at the rising 13-DMA. If settlement holds, price could test resistance at 335.975. Resistance then comes in at 337.575. 

The Feeder Cattle Index increased and is at 335.89 as of 07/31/2025. 

October Live Cattle opened higher and rallied to the high at 225.075. It reversed course and broke down to the low at 222.475. It consolidated the rest of the session and settled in the middle of the range at 223.675. The breakdown to the low stopped right at Thursday’s low forming a Tweezer Bottom candlestick formation. This is in direct opposition to the Bearish Engulfing candlestick formed on Thursday. The weekly candle formed a Shooting Star candlestick which could be considered bearish. The market was roiled by the weak employment report and the resulting crash in the Equity markets. This kept bulls honest as liquidation likely took place from profitable long positions to cover losses in the Equities. The Bearish Engulfing Candlestick came about from month-end profit taking. The sellers who missed out at the all-time high which was established on Wednesday at 230.425 kept the pressure on cattle as the outside markets flailed. The cash market however, completely ignored the past two days of selling in the futures market. Friday established new all-time highs in the live market and the dressed market. Live cattle traded at 247.00 and dressed reached 390.00. The packer didn’t even attempt to try to get lower prices as producers told me they were aggressive in Western Nebraska bidding 247.00. The were steady at 245.00 in the East. They remain stick in paying high prices for cattle as Kansas saw trades as high as 240.00. This set new highs in the South. Even as they continue to roll back slaughter they can’t get prices to retreat. This week’s slaughter is estimated at 535,000. This is likely the lowest number for this time of year in years. Next week’s numbers will likely be in the same area. The lower slaughter numbers and the higher prices indicate to me that supplies are tighter than the market realizes. Weights aren’t climbing, the grading has stalled and the packer wants choice and prime. Keep feeding cattle and give me the higher grades. But the grading has stalled and producers aren’t in a hurry to sell. What is a packer to do? We’ll see!... A failure from settlement could see price test support at the rising 21-DMA now at 222.075. Support then comes in at 220.05. If price can hold settlement, it could test resistance at 224.55. Resistance then comes in at 225.575.

Boxed beef cutouts were mixed as choice cutouts increased 1.90 to 363.22 and select decreased 0.87 to 340.50. The choice/ select spread widened and is at 22.72 and the load count was 72.

Friday’s estimated slaughter is 93,000, which is below last week’s 96,000 and below last year’s 116,448. Saturday slaughter is expected to be 1,000, which is below last week’s 5,000 and last year’s 4,229. The estimated slaughter for the week (so far) is 535,000, which is below last week’s 549,000 and last year’s 592,526.

The USDA report LM_Ct131 states:  So far for Friday, negotiated cash trade has been moderate on moderate demand in Kansas. Compared to Thursday, live purchases have been 1.00 higher at 236.00. Negotiated cash trade has been light to moderate on moderate demand in Nebraska. Compared to Thursday, live purchases have been 2.00 higher at 247.00 while dressed purchases ranged from 382.00-383.00, but not enough for an adequate market test. The last established dressed market in Nebraska was Thursday at mostly 383.00. Negotiated cash trade has been light on moderate demand in the Western Cornbelt. Compared to Thursday, live purchases have been steady at 245.00 while there have not been enough dressed puchases for a market test. The last established dressed market in the Western Cornbelt was Thursday at mostly 383.00. Negotiated cash trade has been mostly inactive on moderate demand in the Texas Panhandle. The last established market in the Texas Panhandle was Thursday at 235.00.

The USDA is indicating cash trades for live cattle from 232.00 – 247.00 and from 380.00- 390.00 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

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

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