Grain and livestock futures are all higher early on Friday.
Cattle futures continue to rally pushed by better cash news.
Scott Varilek with Kooima Kooima Varilek says early fed cattle cash trade has been steady in the South at mostly $181, which at least starts the bottoming process after six weeks lower for the cash market.
Bids turned to $182 in the North early Friday and by mid morning some $182 cash was reported on a live sale basis with $288 on a dressed basis, fully steady with last week’s weighted average in Nebraska.
According to Varilek the strength and recovery in the stock market has helped ease the nervous selling by fund traders in the cattle futures as well.
However, he says the markets still have some healing to do technically to get the funds to come back in and really push the long side of the market again.
Right now there is more interest by traders in buying the deferred contracts perhaps with the ideas that is when the cattle inventory will tighten again and get into the smallest numbers.
Lean hog futures seem to be following cattle but also saw some early technical buying.
Varilek doesn’t think the recent highs will be retested due to rising numbers and tightening shackle space and the seasonal softening of the cash market.
Grains were all higher to start the session with corn and soybeans extending Thursday’s rally after the market seemed to breathe a sigh of relief soybean yield wasn’t raised.
Plus even though corn yield was up .5 bpa the ending stocks number ended lower.
Demand and export business has also improved for the grain sector and especially for soybeans.
China was back in buying 3.67 million bushels on another flash tender Friday morning.
Varilek says a lower dollar and higher wheat prices also helped the row crops early as that market is putting in some weather premium on dryness concerns in the Black Sea and Southern Plains.
