Cattle trading two-sided early in the session with live cattle posting the fourth lower day on profit taking and correcting the oversold status of the market. Cash trade started on Wednesday lower by $2 in the south at $182, with only light volume in the north with live prices $180-$181, steady to $1 lower and scattered dressed sales.
Scott Varilek, Kooima Kooima Varilek, says he was expecting even lower cash and towards the end of the day bids were being passed so he is optimistic about cash firming from these levels as producers still have the leverage. He is concerned about some chart damage in the June contract in live cattle which filled a gap and then closed below that level.
He cautions producers to make sure they are looking at risk management because feeder cattle replacement costs are high and the tendency will be to feed them longer with lower priced corn which will start to add to weights. Varilek says cash feeders are still hot in the country due to tight supplies.
Hogs started lower but then firmed extending gains after a strong technical day Wednesday on talk of a Prop 12 ban and anticipating strong weekly exports. Sales were confirmed at nearly 72,000 metric tons.
Grains open lower this morning and made new lows after the USDA Ag Outlook numbers showed bigger ending stocks in the coming marketing year. However, grains are trying to stabilize with hopefully the most bearish news worked into the market. Weekly exports were decent for corn at 51.5 mb but weak for soybeans at 13 mb and wheat at only 12.8 mb.
