Live Cattle futures spreads: Bullish

  • The August-October closed at $4.625
    • as compared to the end of June settlement at $3.70
    • and the previous 5-year high weekly close for last week at $0.025
  • The October-December (slide 2) closed at (-$0.75)
    • as compared to the end of June settlement at (-$0.325)
    • and the previous 5-year high weekly close for the first week of August at (-$0.125)
      • with the previous 5-year average weekly close for last week at (-$4.00)
  • The December-February closed at (-$0.625)
    • as compared to the end of June settlement at (-$.10)
    • and the previous 5-year high weekly close for last week at (-$0.625) from 2024
  • The bottom line is the commercial outlook on supply and demand remains bullish though deferred spreads did weaken toward the end of July.
    • I have no idea what this means for USDA’s On Feed, Placements, and Marketings numbers for July.
    • And frankly it doesn’t matter.
    • The Cash Index, Basis, and Futures Spreads are all still bullish. End of story.

Feeder Cattle futures spreads: Bullish

  • The August-September closed at (-$0.175)
    • as compared to the end of June settlement at $0.05
  • The September-October (slide 3) closed at $1.375
    • as compared to the end of June settlement at $2.10
  • The bottom line is that despite spreads weakening during July, the commercial outlook remains bullish.
    • The Cash Index is at an all-time high
    • Basis firmed to close out July

Lean Hogs futures spreads: Neutral-to-Bullish

  • The August-October closed at $17.55
    • as compared to the end of June settlement at $15.10
    • and the previous 5-year average weekly close for last week at $18.575
  • The October-December (slide 4) closed at $7.85
    • as compared to the end of June settlement at $8.625
    • and the previous 5-year high weekly close for last week at $7.425
  • The December-February closed at (-$2.225)
    • as compared to the end of June settlement at (-$1.80)
    • and the previous 5-year high weekly close for last week at (-$2.325) from 2024
  • It’s interesting to note there was some commercial selling in nearby futures spreads to close out July. Something to keep an eye as August progresses.