Cattle futures fade the record high cash trade with caution heading into the Cattle on Feed Report.
Scott Varilek, Kooima Kooima Varilek, says, " Cash traded at record levels in North, mostly $192 but as high as $193 live, with Southern live sale prices at mostly $187, up $1 from last week.”
However, the cattle futures are overbought and due for a correction. Plus, Varilek thinks there is some positioning and caution heading into the USDA report, despite bullish estimates.
Trade estimates have the on feed number at 99.4%, placements down nearly 6% and marketings up nearly 10%.
Futures are still at a discount to the fed cash cattle trade which will continue to support the futures so Varilek thinks its possible for the futures to eventually take out the March highs.
The cash market for feeders has also been on fire with the last of the run coming in.
Lean hogs have had a tough week and took out key support on the charts so funds are still liquidating long positions. The market is searching for a low. “I think we’re close as the June contract should find good support around $94,” he says.
Grains chop ahead of the holiday eyeing weather.
Corn has been following the wheat market but has had a difficult time take out overhead chart resistance in the July with the large amount of old crop corn still being sold.
Varilek does not think that the corn needs to put in any more weather premium even if rains confirm over the weekend. “I still feel like rain makes grain and I am not concerned about farmers not getting the corn crop planted at this point,” he says.
