Grains higher Monday while livestock see red after a mixed start.
Brad Kooima of Kooima Koomia Varilek says cattle are lower after lower weekly closes last week but despite steady to $1 higher cash at mostly $188.
However, he doesn’t think the market did any technical damage.
“Yes, we had a lower week but it was not a reversal, meaning we didn’t make new highs and then close lower,” he adds.
Cash has been grinding higher for six weeks which is constructive, plus beef prices are moving higher with increased kill and that should be supportive.
The pressure may be light profit taking by the funds which are long over 85,000 contracts and there may even be some hedge pressure.
He says the market is overbought after December live cattle were up 22 out of 25 sessions.
“There are two ways to correct a market. One is to have a 38% correction, the other is to just move sideways for a while, which is what we are doing. So, give me the sideways correction any day,” he says.
There is also some caution ahead of the Cattle on Feed Report on Friday, as the October report was the one that started the big correction off the record highs in 2023.
Lean hog futures made new highs for the move on fund buying early and then saw some profit taking or hedge pressure.
Will the funds keep buying hogs on the breaks and push the futures into new contract highs?
Grain markets are back higher after a poor close Friday with buying tied to a string of flash export sales and missed rains in the Southern Plains wheat areas.
