Livestock start mixed Monday, with grains higher.
Brad Kooima, Kooima Kooima Varilek, says live cattle futures are consolidating after new highs for the move on Friday on the heels of another week of record cash, which is healthy.
Cash trade broke in the South at the volume at $200-$201, up $4-$5 but there were some sales as high as $202 live.
In the North, most of the trade volume was at $320 dressed, up $5 from last week’s weighted average, but reaching as high as $330.
Live sales prices in the North hit as high as $204 in Nebraska and $205 in Iowa.
Kooima thinks cash can push even a little higher this week as much of the business was picked up right away for this week.
February live cattle futures have not taken out the all time high, but Kooima says it is just a matter of time.
Right now February is trading at a bit of a discount to cash, which is unusual and may reflect some fear in the market at trading at this historically high levels.
Open interest has not fallen indicating a top or liquidation.
Lean hog futures are slightly higher and may have found a bottom at least for now but Kooima is cautious because he thinks hogs are seeing spillover strength from cattle and could be suseptible to selling if the tariff war erupts.
Meanwhile, corn and soybeans make new highs for the move still digesting USDA’s bullish report data and the shocking cuts in yield, production and ending stocks.
But are $5 corn and $11 beans in the cards?
Kooima thinks corn will hit that level due to strong demand, but is more cautious about soybeans with the record South America crop and possible tariff concerns.
He also says there could be some farmer selling at these levels that will cap the rally and in fact, the market is already seeing some of that.
