Cattle are higher early Thursday as well as the grain markets, with lean hogs mostly lower.
Cattle Extend Gains on Better Cash News
Scott Varilek of Kooima Kooima Varilek says cattle futures are trading higher building on Wednesday’s big reversal which was initially triggered by trade news but then better than expected cash trade added to the rally.
Varilek says some cash trade Thursday morning has been reported at $225, which steady to slightly better than last week’s weighted average and above expectations. That was true with Northern trade at $230 to $232.
The bulk of Northern dressed trade this week has been at $368 to $370, steady to $2 lower than last week’s weighted averages. Southern live deals on Wednesday were at $222 to $224, also steady to $2 lower than last week’s weighted averages. A little more light trade will likely take place at some point today.
Cattle futures were lower early Wednesday still reacting to news the border would be gradually reopened to Mexican imports starting July 7.
So, does the strength in the futures mean the market has priced that news in?
Varilek isn’t confident that’s the case as there is still uncertainty regarding how many cattle will be coming across the border.
Other positive news includes, a strike has been avoided at the Amarillo, Texas Tyson Foods Beef Processing Plant. Union members voted yesterday, and 93% of the voters approved a new contract, that includes a wage increase, more paid time off, expanded retirement benefits, ratification of bonuses and health insurance benefits that begin when hired.
Lean Hogs Slide with Lower Cutouts and LHI
Lean hog futures are lower early with another $1.55 drop in the pork cutouts and the Lean Hog Index was also down $.77 at $110.22. Plus weekly exports were disappointing at only 27,100 MT this morning.
However, Varilek thinks the market will be well supported by the tighter numbers moving forward associated with disease and on hopes for more trade with China.
Grains Continue Rally on China Hopes or Just Short Covering?
Grains are mostly higher with corn and soybeans extending some nice gains on Wednesday.
The rally came on the heels of news of a trade deal with Vietnam but also speculation President Trump will be making an announcement of a China deal at the rally at the Iowa State Fairgrounds this evening. President has hinted he was going to be releasing some positive news for farmers.
However, Varilek thinks the grain markets are also seeing short covering or short profit taking heading into the holiday and a three day weekend, especially after corn made new contract lows and soybeans made new lows for the move on Tuesday and were oversold.
Exports this morning were at 21.0 million bu. for corn old crop and 37 million bu. new crop, soybeans at 17 million bu. old and 8.8 million new, with wheat at a strong 21.5 million bu.
Private exporters also reported flash sales of 5.9 million bu. of corn to unknown destinations for 2024-25, 8.3 million bu. of soybeans to unknown for 2024/25. Plus, 195,000 metric tons of soybean meal to unknown. 45,000 MT for 2024/25 marketing year and 150,000 MT for 2025/2026.
