Cattle and lean hog futures saw early strength on Monday with grains quietly mixed.
Cattle Futures Rally With Cash
Cattle futures saw a mixed opening and quickly moved higher. Brad Kooima with Kooima Kooima Varilek says he was concerned the trade might view a slightly bearish Cattle on Feed report placement number as a reason to sell but the market was more focused on the higher cash trade Friday.
Southern cash ranged from $232 to a few up to $236.50, but the volume was at $233 to $235, steady to $2 higher than last week. Northern dressed trade ranged from $364 to mostly $370, up $5 and live sale prices ranged from $233 to $236.50. So a strong showing that Kooima says may have been pushed somewhat by the winter weather system bearing down on cattle feeding areas.
Cash Trumps Cattle on Feed
The USDA Cattle on Feed report was slightly bearish according to Kooima. On feed totals came in at 96.8% which was in line with expectations but it is still 95% of the five year average, so bullish. The placements at 94.6% of last year were slightly above expectations, while the marketings were at 101.8%, in line with estimates.
Placements Jump in Texas
Kooima says this is the first USDA Cattle on Feed report that is comparing apples to apples, meaning this is the first month of 2025 where the border was closed to Mexican feeder cattle imports. Last year Texas placements were sharply lower as a result so this report showed placements in Texas at 110% of a year ago.
Quarterly Steer and Heifer Breakdown
The quarterly breakdown of steers and heifer in feedlots shows 38.7% were heifers with 61.3% steers. Kooima says this is very close to year ago totals and even the last quarter. So while there is a slight indication of heifer retention its is not enough to cause concern above rapid rebuilding.
Live Cattle Technically Breaking Out?
Live and feeder cattle futures were higher on Friday and for the week but live cattle have been sideways on a chart. So, is the market finally seeing a breakout technically or what would it take to confirm that? Kooima says the highest open interest is in the April live cattle contract and currently he is watching $239.05 on a chart because a close above that level could push futures to the next level. That could cause the chart gap area to be filled and a possible retest of the October all-time highs would be possible.
Lean Hogs Rebound Will Summer Months Close Above $110?
Lean hog futures were back higher after mild profit taking in the front end of the board on Friday. The summer month futures continue to grind into new contract high areas pushed by disease and are knocking on the door of $110. If that level is taken out where is the next objective? Kooima says while the funds could push the market higher he suggests producers look at hedging those levels and locking in some profits.
Corn and Soybeans Hitting Chart Resistance
Corn and soybeans started off lower with some spillover from outside markets that were reacting to President Trump’s threat of 100% tariff on Canada for their trade agreement struck with China. Soybeans were higher last week on hot, dry weather in Argentina and Southern Brazil but were struggling to extend those gains.
The problem according to Kooima is both corn and soybeans continue to run into chart resistance. For March soybeans the 200-day moving average has been a sticking point. While export demand has also been stronger, especially for corn, Kooima says it still isn’t enough to chew through the massive supplies with a record crop and that is keeping a lid on a bigger rally.
