AgDay Markets Now: Brad Kooima Says Despite a Correction He’s Bullish About Cattle Longer Term

Row crops recovered on Tuesday, while cattle posted another lower day. Brad Kooima, Kooima Varilek says all those markets saw corrective action.

Row crops recovered on a technical bounce and with lower crop ratings.

Corn and soybeans both saw a deterioration of conditions by 2% with the Eastern Corn Belt too dry and the Western Corn Belt too wet.

Live cattle futures set back a second day after hitting new near-term highs Monday and failing even though cash was at record levels.

However, Brad Kooima of Kooima Kooima Varilek says he knows of some cash trade as high as $198 in the North and a small regional paid $200, so it was a historical week and is an indication of how tight the numbers are in those areas which gives those producers leverage.

“Compare that to the South which was mostly $186 with some $188 late.”

Feeder cattle futures consolidated with higher corn, but he thinks the live cattle futures correction is just routine profit taking. “I think the challenge in a market like we had on Friday is what do you do for an encore? Do you expect cash is going to be $3 to $5 higher every day? Well clearly that’s not going to happen. So, you’ll have some people saying, I’m going to take the opportunity to take a little money.”

He says he was still encouraged that even on a down day in live cattle the forward spreads were working with the front months stronger than the back months.

The market is gearing up for a Cattle on Feed Report on Friday and even with bullish expectations there is often times caution by the trade prior to the numbers.

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