Hogs
Price action: Hog futures followed the cattle and feeder complex higher Friday, with nearby February rising 17.5 cents to $82.30. Most-active April futures rose $1.00 to $88.20. That represented a weekly decline of 12.5 cents.
5-day outlook: The cash hog market seemed to stall this week, as indicated by the CME hog index. Wednesday’s official quote rose 21 cents to $81.93, and today’s USDA data implies Thursday’s preliminary figure slipped one cent to $81.92. The dip was somewhat surprising given yesterday’s wholesale market advance of $1.60 to $91.77, as well as today’s followthrough rise of 25 cents to $92.02. We expect more of the same next week, with diminishing weekly slaughter totals meeting firm demand. This week’s slaughter total at 2.477 million head marked a surprising 211,000 (7.8%) annual reduction. That may simply reflect the Martin Luther King holiday on Monday, but we still harbor suspicions the forthcoming supply of hogs will fall short of the totals implied by the December Hogs & Pigs report from the USDA. Given these conditions, as well as the ongoing surge to record highs in cattle prices, we see little reason to expect a downturn next week.
30-day outlook: We expect current strength to persist into mid-to-late February. That reflects the traditional tendency for midwinter gains, as well as ideas that the late arrival of Easter this year will tend to extend the usual winter surge in processor/wholesale demand for hams slated for Easter weekend features. And as mentioned above, if midwinter hog supplies fall short of expectations, that could also prove quite supportive.
90-day outlook: Hog supplies will almost surely continue dwindling toward early-summer lows during the coming weeks. Those reductions regularly play a role in the traditional late winter-early spring hog and pork market rally, although market action in March and early April can be unpredictable. We attribute that uncertainty to fluctuations in the arrival of Easter, as well as the onset of spring grilling demand from consumers. Again, we doubt the market will be swamped with hogs and pork in the coming weeks, but we also think grocers will continue featuring the various pork cuts quite actively, which could power robust consumer demand. Increased optimism about the U.S. economy, as well as elevated cattle and beef prices, also seem likely to boost the price outlook.
What to do: Get current with feed coverage.
Hedgers: You are carrying all production risk in the cash market.
Feed needs: You should have all soymeal needs covered in the cash market through the end of February. You are hand-to-mouth on corn-for-feed needs.
Cattle
Price action: April live cattle futures gained $2.30 to $203.025, nearer the daily high and set a contract high. For the week, April live cattle rose $5.525. February live cattle set a record high close, basis nearby futures, up $3.675 at $204.775. March feeder cattle futures also set a new contract high, up $2.50 at $276.575 and for the week rose $8.525. Expiring January feeder cattle futures today set a record-high close, up $1.625 at $278.70.
5-day outlook: Today’s strong gains and technically bullish weekly high closes in live and feeder cattle futures suggest still more price upside next week. However, after three straight sessions of price gains, both futures markets are now due for routine downside price corrections early next week. In fact, price corrections early next week would be healthy signals the price uptrends can still be extended.
Cash cattle trade has been light so far this week, but bulls and producers scored major wins Thursday as fed steers traded over $209.00 in Nebraska and topped $210.00 in the Iowa-southern Minnesota region. That almost surely triggered today’s big gains despite the looming afternoon release of the monthly Cattle on Feed report. The noon report today showed boxed beef cutout values weaker, with Choice grade down $2.19 at $328.77 and Select grade down $1.08 at $316.13. The Choice-Select spread is presently $12.64. Movement at midday was decent at 77 loads. USDA this morning reported weekly U.S. beef export sales of 15,100 MT for 2025, while shipments totaled 11,800 MT. The USDA will release its annual Cattle inventory report next Friday (1/31), which is likely to show the U.S. cattle population again slipped below the year-ago total.
30-day outlook: This afternoon’s USDA monthly Cattle-on-Feed report will provide fresh data on feedlot supplies in the coming weeks and is expected to lean a bit friendly for cattle futures prices. The key large feedlot (1,000-plus head) inventory number is seen down 0.3% from year-ago as of Jan. 1. The report is also expected to show a 1.1% increase in the number of cattle moved into feedlots last month, despite a ban on Mexican feeder cattle imports. Marketings are anticipated to be up 1.2% from December 2023. The agency will also report frozen meat stocks at the end of December, with the five-year average monthly change in beef stocks being an 18.3-million-lb. increase.
90-day outlook: It’s likely the cyclical shortage of fed cattle supplies will continue in the coming weeks. However, weekly cattle slaughter tends to turn higher in mid-to-late March, which is why fed cattle prices have historically tended to post annual cash market highs around that time frame. Still, the supply/demand imbalance that tilts to the demand side is reflected in the wholesale beef market. Choice-grade beef cutout value hit record winter highs above $330.00 last week. That suggests consumer beef demand remains strong. Also, the latest consumer price index data showed December steak prices saw a 0.2% annual decline even though overall beef prices rose 4.8% annually in the period.
What to do: Get current with feed coverage. Carry all production risk in the cash market for now.
Hedgers: Carry all production risk in the cash market for now.
Feed needs: You should have all soymeal needs covered in the cash market through the end of February. You are hand-to-mouth on corn-for-feed needs.