Cattle futures are mixed early, with hogs higher. Soybeans rally, while corn and wheat ease.
Cattle Futures Try to Recover
Brad Kooima of Kooima Kooima Varilek says cattle futures saw some recovery on the opening Monday after a melt down on Friday which produced limit down closes in most of the feeder cattle contracts and resulted in expanded limits on Monday.
The selloff was triggered by President Trump’s comments at the White House that he had a plan to immediately lower beef prices, but gave no details.
U.S. to Buy Argentina Beef?
Sunday President Trump said the administration was looking at purchasing Argentina beef to help with beef inflation.
Kooima says buying Argentina beef would not be a huge game changer for the beef or cattle market.
“The imports of beef from Argentina are insignificant,” he says.
With some fear alleviated that at least the Southern border was not reopening to Mexican feeder cattle imports or the U.S. wasn’t dropping the additional 50% tariffs on Brazilian beef the market is trying to stabilize.
USDA over the weekend announced a detailed action plan of how they will be responding when New World Screwworm (NWS) gets into the U.S.
Kooima says there are plenty of protocols in place to allow Mexican feeder cattle to enter the U.S. and the cold weather season will also slow the possible spread.
Cattle Producers Balk at Government Plan
Meanwhile, Kooima says the cattle industry is opposed to any government intervention to try to fix the market.
Cattle Futures Ignore Higher Cash
The cattle futures totally ignored the higher fed cash trade development on Friday.
The North traded fed cash at $240, few at $241, up $5 and dressed at mostly $372, up $9 from last week’s weighted average in Nebraska. Southern live deals were at $240, $5 higher (basis Kansas) than the previous week.
“The fact that a major packer was willing to come out and pay $5 more for cattle on Friday as the futures board was melting down is bullish to me and indicates that cash is still king,” he says.
Lean Hogs Try to Recover
Lean hog futures were lower on Friday and December made a two month low, while also posting a lower weekly close for a second week.
The futures are trying to recover early Monday as Kooima says the market is oversold and due for a bounce and is likely finding some chart support.
Soybeans Rally on China Hopes
Soybeans are extending gains Monday after a higher weekly close last week and easing tensions between the U.S. and China.
President Trump said over the weekend he would be meeting with Chinese President Xi in two week and would be asking Beijing to buy the same amount of soybeans they did last year. He also reiterated that 100% tariffs are not sustainable and tariffs would be dropped if China shares rare earths.
Corn Trying to Follow Soybeans
Corn tried to follow soybeans early in the session but is struggling as it is running into chart resistance and with harvest pressure continuing.
