Cattle are sharply lower, hogs mixed with corn and soybeans higher early Friday.
Cattle Crash on Trump’s Plan to Lower Beef Prices
Live and feeder cattle futures gapped lower on the open Friday with some feeder cattle contracts touching limit down $9.25 as panic selling hit the complex.
Joe Kooima of Kooima Kooima Varilek says the funds were liquidating long positions on the open Friday after President Donald Trump said the administration was working on a plan to lower beef prices. Some of it was triggered by algorithm trades that key their formulas off headlines.
“We are working on beef, and I think we have a deal on beef,” Trump told reporters at the White House. The price of beef is “higher than we want it, and that’s going to be coming down pretty soon too. We did something,” Trump added, without elaborating.
What Could the Plan Entail?
Kooima says there is a great deal of speculation about what the plan could include.
One idea that is being floated is the possibility of the U.S. buying Argentina beef or at least lowering the quote and tariffs to allow more product to move into the U.S. This comes after a meeting between leaders of the two countries this week and Treasury Secretary Bessent remarking that the U.S. was considering another $20 billion bail out plan.
The trade has also been nervous about President Trump lifting the additional 50% tariff on Brazilian products including beef which is currently keeping their beef out of the U.S. or at least limited. They were a top beef importer prior to the tariffs.
While the border may stay closed to Mexican feeder cattle imports Kooima says increasing beef supplies in Mexico may also be another source of beef the U.S. could consider purchasing.
So far there has been nothing official except that USDA Secretary Brooke Rollins said they were not considering any cash payments for herd rebuilding.
Cash Cattle Higher in the North
Meanwhile the market is ignoring the news of higher fed cash trade in the North yesterday at $239 to mostly $240, up $5 from last week. Dressed prices at $372 to $373 were up $9 to $10.
Kooima says Southern bids had also been raised to $240 Friday morning.
Yearlings and calves at the sale barns were also continuing their trend of record prices on Thursday.
Are Hogs Close to Bottoming?
Lean hog futures were mixed early Friday with nearby contracts lower as fund liquidation has continued.
Kooima says he’s been watching the $85.00 level on February as an area of support but it was being flirted with on Friday morning.
Since the USDA Hogs and Pigs Report he says funds have been liquidating as the numbers were positive near term but bearish longer term and indicate increasing numbers.
Those are already being seen in daily slaughter totals and Kooima says that has been weighing on futures.
However, with the discount the futures are holding to the cash index he hopes the market will soon find some footing.
Corn, Soybeans Extend Gains
Corn and soybean futures were higher early Monday.
Corn was up for a fourth session and Koomia says it is seeing technical buying after December corn bounced off support earlier this week and then closed above key moving averages Thursday, including the 100 day.
However, he thinks lower than expected corn yield reports are also fueling some of the support.
Soybean futures were also higher as President Trump had more positive comments regarding China trade.
