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October Lean Hogs opened higher, broke down to the low at 93.975 and then turned higher. It worked higher to the high at 95.20. It settled near the high at 95.025. The rally stalled just under resistance at 95.30 but is now solidly above resistance at 93.50 and the 200-DMA now at 93.45. Exports surged on the most recent report, climbing to 42,000 MT, which is the highest in 9-weeks. Mexico was back buying pork in a big way with over 26,000MT after being relatively quiet the past few weeks. They are saying they will import more pork than they produce in their own country for 2026. The US will benefit from that as we sell them around 85% of their imports. Slaughter levels remain below expectations, yet the cutout continues to flounder. Cash is also languishing as these markets consolidate near their recent lows. The breakout above the August 6^th high of 93.275 has taken price to the next level of resistance. This isn’t too exciting as funds are adding longs to their positions but not moving price at a fast pace to the upside. In my opinion, we will need to see cutouts and cash prices surge to keep futures prices moving higher. If prices can’t break out to ho higher levels, we may see price come back to the previous range hogs were in with 93.275 as the high and 87.925 the low. Continued export strength and lower slaughter could see cash break higher and help propel prices higher. We’ll see!... If price can take out the Friday high, we could see price test resistance 97.30. Resistance then comes in at 98.475. A failure from settlement could see price test support at 93.50. Support then comes in at 92.375. 

The Pork Cutout Index decreased and is at 112.71 as of 08/28/2025. 

The Lean Hog Index decreased and is at 106.43 as of 08/27/2025.

Estimated Slaughter for Friday is 467,000, which is above last week’s 453,000 and below last year’s 473,000. Saturday slaughter is expected to be 21,000, which is below last week’s 51,000 and last year’s 41,767. The estimated slaughter for the week (so far) is 2,391,000, which is below last week’s 2,410,000 and last year’s 2,427,648.

October Feeder Cattle is now the lead contract as its volume has exceeded the volume of the September contract. It opened higher, broke down to the session low at 358.625 and then rallied the rest of the session to the high at 365.20. It settled near the high at 364.775. The open saw price attempt to follow through to the downside after Thursday’s profit taking selloff as we neared the end of the month. The breakdown took price just below support at 358.875 where bullish traders regained control of the market and rallied price. The was one more attempt to break down price late morning but with the Feeder Index at record highs, traders seemed confident in buying futures in spite of the long upcoming weekend due to the Labor Day Holiday. The rally though strong did not take out the Thursday high or resistance at 365.675. This keeps bulls on their toes in my opinion. It is, however, a positive sign that price closed above the rising 8-DMA now at 362.375. The cash market remains strong as supply continues to tighten as we still are not getting any cattle in from Mexico causing big drops in the Texas area. This isn’t expected to change any time soon as the Screwworm makes its way North. Producers have also sold cattle earlier than normal due to the soaring prices so we could see prices go higher as these cattle will not be for sale in their normal time frame according to analysts. Things could get interesting as we move towards Fall. We’ll see!... A breakdown from settlement could see price test support at 363.00 and the rising 8-DMA. Support then comes in at 358.875. If settlement holds, price could resistance at the all-time high now at 369.375 on the continuous chart.

The Feeder Cattle Index increased and is at 365.38 as of 08/28/2025. 

October Live Cattle opened higher and broke down to the low at 235.95. The breakdown was an attempt to get some follow-through to the downside after Thursday’s breakdown on profit-taking before the month-end close. It pushed through support at the rising 8-DMA 237.425 but stalled above the key level at 235.625. It then turned higher and rallied the rest of the session to the high at 239.90. It settled near the high at 239.65. The rally took price past resistance at 238.125 but couldn’t overtake the Thursday high at 240.125 as it nearly erased all the losses from the previous session. The initial breakdown was expected to build as we were at month-end and profit-taking looked likely on the open. Traders, however, had other ideas as strength in the Southern cash market enthused bulls as it played catch-up to the North. Trades were taking place at 242.00 in the South this week as the North stayed mostly steady. I believe traders feel the South is going to continue to build on price as their supplies are in decline. Producers in the North seemed ready to accept steady prices but Southern producers look like they finally realized they have some pricing power and the spread narrowed between the two major producing centers. The cutout is also showing strength as it made a new high at 415.41. This could keep the packer in slaughter mode as they raised slaughter this week to 565,000 head from last week’s 551,000. Next week is a short week for slaughter but if cutouts can stay up here, we could see packers pressing the envelope afterwards. This week’s slaughter was the largest since mid-July as the packing industry tries to take advantage of the higher cutout and stable cash prices. If the cutout doesn’t fall back too much as it usually does after the Labor Day Holiday, the packers could keep slaughter levels above 550,000 which could benefit producers going forward. We’ll see!... A failure from settlement could see price test support at 238.125. Support then comes in at the rising 8-DMA and then 235.625. If price can hold settlement, it could test the all-time high at 242.075.

Boxed beef cutouts were higher as choice cutouts increased 1.00 to 415.41 and select surged 4.16 to 390.00. The choice/ select spread narrowed and is at 25.41 and the load count was 109.

Friday’s estimated slaughter is 101,000, which is above last week’s 100,000 and below last year’s 123,038. Saturday slaughter is expected to be 2,000, which is above last week’s 1,000 and below last year’s 10,737. The estimated slaughter for the week (so far) is 565,000, which is above last week’s 551,000 and below last year’s 616,790.

The USDA report LM_Ct131 states:  So far for Friday, negotiated cash trade has been light to moderate on moderate demand in Nebraska. Compared to Thursday, live purchases have been steady at 245.00 while there have been a few dressed purchases at 385.00, but not enough for an adequate market test. The last dressed market test in Nebraska was Thursday from 385.00-392.00, mostly at 385.00. Negotiated cash trade has been mostly inactive on moderate demand in all other feeding regions. The last established market in the Texas Panhandle was Thursday with live purchases at 242.00. The last established market in Kansas was Thursday with live purchases at 242.00. The last established market in the Western Cornbelt was Thursday with live purchases at 245.00 and dressed purchases from 385.00-392.00, mostly 385.00.

The USDA is indicating cash trades for live cattle from 240.00 – 246.00 and from 380.00 – 392.00 on a dressed basis (so far).

United States Cattle on Feed Down 2 Percent 

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 10.9 million head on August 1, 2025. The inventory was 2 percent below August 1, 2024. 

Placements in feedlots during July totaled 1.60 million head, 6 percent below 2024. Net placements were 1.55 million head. During July, placements of cattle and calves weighing less than 600 pounds were 340,000 head, 600-699 pounds were 245,000 head, 700-799 pounds were 365,000 head, 800-899 pounds were 378,000 head, 900-999 pounds were 195,000 head, and 1,000 pounds and greater were 75,000 head.

Marketings of fed cattle during July totaled 1.75 million head, 6 percent below 2024. Other disappearance totaled 51,000 head during July, 9 percent below 2024.

**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

www.walshtrading.com

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