Cattle higher early Monday, with hogs mixed. Corn and wheat are higher, soybeans slightly lower.
Cattle Futures in Recovery Mode After Key Weekly Reversals
Brad Kooima of Kooima Kooima Varilek, says cattle futures are in recovery mode for a second day after scoring key weekly reversals last week on the charts, a bearish sign of a possible top.
He says the key for the futures is to hold last week’s lows because if that area if violated on the charts it could trigger more fund long liquidation.
On the August live cattle contract that comes in around $205.40 and conversely that contract needs a close above $208.50 to fully negate the bearish reversal.
Cash Cattle Hit Record Highs Fifth Straight Week
Cash trade hit record levels for a 5th straight week with the majority of business in the North at mostly the $228 level, $2 higher for the week. However, some $229 and $230 live with dressed prices mostly $358-$360.
“I have said it before, the beginning and the end of all markets starts in Iowa, largely because of the amount of cash trade we negotiate,” he explains.
In the South cash cattle were mostly $220 but ranged from $218 to $220.
Kooima thinks this week’s cash trade could be steady at best, even though show lists are once again very tight because packers are buying for a short kill week next week due to Memorial Day.
Weekly slaughter totaled 566,000 but it is hard to determine if it is due to packers cutting kills or the lack of available supply according to Kooima.
One positive is weights dropped last week and so he’s hopeful that will start to pull down production levels.
- Average steer dressed weights for the week ending 5/3 averaged 938 pounds. This is down 8 pounds from the prior week as weights seasonally decrease, but 15 pounds above last year. The spread from last year to this year has narrowed in 11 pounds on the week.
Lean Hogs Retreat After Higher Weekly Closes
Lean hog futures are mixed early with nearby contracts seeing some profit taking pressure due to the premium those futures are holding to the lean hog index and after running into chart resistance.
However, with increasing disease pressure the back months are building in a premium.
Corn Follows Wheat Monday
Corn futures are trying to follow the rally in wheat Monday morning, but put in a poor week with new lows in the December contract.
Despite a positive May WASDE the market saw pressure from favorable weather and fund selling and funds are now short nearly 85,000 contracts.
Soybeans Ease Watching Bean Oil
Soybeans are slightly lower to start Monday keeping an eye on the bean oil market.
Bean oil held key support and bounced on Friday but may be suseptible to more liquidation on fears the EPA is going to disappoint with their blending levels for biomass based diesel for 2026.
New crop or November futures did post a higher week with lower acres and the 295 million bu. ending stocks in the May WASDE.
