Cattle end lower again Tuesday while grains and hogs rally.
Brad Kooima, Kooima Kooima Varilek, says cattle futures continue to consolidate off recent record highs in routine profit taking mode as the markets got overbought.
The feeder cattle futures have seen the biggest correction in response to the border reopening to Mexican feeder cattle.
Kooima says the market may have also been disappointed with the 5 area weighted average price which came in at $209.57 down $1.22 from last week.
However, he thinks this is a healthy correction in a longer bull market.
The funds are long in the cattle market and have continued to defend that position.
Consumer demand has stayed strong at higher prices.
Plus, the cattle inventory report confirmed the market isn’t even into the tightest numbers yet and those may hit the second half of 2025.
That means cattle prices could make new record highs during 2025.
The grain markets extended gains for a second day working in the 30 day delay in tariffs on both Mexico and Canada.
Plus, there is lingering hope the Trump Administration will be able to avert trade war with China and possibly revisit the China Phase One deal or strike a Phase Two agreement.
South American weather has continued to be supportive with lingering weather concerns in Argentina; a well-renowned meal exporter.
World Weather Inc. notes crop moisture and heat stress is likely through early next week.
The funds are already long in the corn market and need to close the March above $5 to keep the momentum going.
While soybeans managed to close above the 200 day moving average.
