Grains were higher early Friday morning with cattle and hogs trying to recover after a tough down day on Thursday.
Cattle Market Tries to Recover Awaiting NWS News
Scott Varilek with Kooima Kooima Varilek says the big losses in the cattle market on Thursday were tied to concerns ahead of USDA’s New World screwworm (NWS) announcement.
USDA Secretary Brooke Rollins will be in Austin, Texas Friday morning with an update on NWS and market participants have been speculating it will be the plans for how to reopen the Southern border to Mexican cattle imports.
Varilek says even if that is the announcement the supplies of Mexican feeders coming into the U.S. will be limited.
So far in 2025 Mexican imports are down 700,000 head.
Does Volatility Signal a Market Top?
The increased volatility in the cattle futures is often a signal of a top in the market but it may be too soon to tell according to Varilek.
That’s because this is an unprecedented market and at these lofty levels the futures can have a sizable correction and not take out key moving averages or change the uptrend.
Varilek says they are closely watching the 20-day moving average in the October live cattle futures because that support has been tested and held and will be the key to keeping fund traders from liquidating.
Cash News Limited
Cash cattle trade will also play a role in the direction of the market on Friday with only light cash trade reported Thursday in the North at mostly $242 live.
However, USDA’s mandatory report indicated some live trade in Nebraska at $245 and in Iowa at $240 to $245, dressed trade at mostly $384 to $386 dressed, up $3 to $5 from last week.
The South has had limited trade at $237.
Boxed beef values have been pushing higher most of the week with Choice values up another $3.30 on Thursday’s close at $393.79.
Varilek says this is typical as retailers ramp up for Labor Day featuring.
Lean Hogs Try to Bounce as Well
Lean hogs were sharply lower Thursday but are trying to recover on Friday.
August went off the board at a $20 premium to the October futures but Varilek says that’s typical and rarely do the futures rally to make up the gap.
He says supplies still look tight for 4Q but could start to build into 1Q which may put some pressure on deferred futures.
Grains Bounce With Corn Eyeing a Close Above $4
Grains were higher early Friday with short covering, technical buying and bargain hunting.
Varilek says corn basis has been improving which is an indication there is some demand coming at the corn market which has helped sponsor the rally since the bearish WASDE numbers.
If December corn can close above $4 will that confirm a low?
He isn’t so confident because of the massive amount of harvest pressure the market will see this fall with a record crop.
Soybeans Poised for Higher Week
Soybeans are poised for a higher weekly close still digesting the bullish WASDE numbers and the rally has helped support corn.
However, November soybeans hit resistance around $10.50 and will need to take out that area before extending the rally.
