Cattle and hogs are mostly lower early Tuesday along with corn and wheat, soybeans bounce.
Brad Kooima of Kooima Kooima Varilek says cattle futures are seeing some early weakness despite last week’s record cash and neutral USDA Cattle on Feed Report compared to expectations.
However, it may be another break that gets bought.
Kooima says the Cattle on Feed Report placements came in at 97.4%, which was actually the lowest figure in the last 10 years, next to the COVID year. On feed was at 98.5% and marketings at 97.5%.
The state by state breakouts also showed that states like Nebraska and Iowa had higher placements compared to a year ago, which he says is showing the migration of cattle to the North where cash has been stronger.
Cash last week was at mostly $230, with a few $231 in the North and Kooima says the South saw very little trade at the $220 level.
As a result, he thinks cash will develop early in the South this week as packers are short bought and the trend will be higher as the South attempts to catch up with the North.
Cattle did have higher weekly closes last week but Kooima says the futures need to retest the record highs to be able to fully negate the key reversals.
Lean hog futures are lower with cattle and continue to narrow up the futures premium to the lean hog index.
However, Kooima says growing disease issues with PEDV are making isowean prices shoot higher and that could eventually support buying in the deferred contracts again.
Corn is lower with the break in the wheat market and mostly favorable weather.
Winter wheat production areas like Nebraska, Kansas and Oklahoma got some much needed rain and there’s more in the forecast so wheat is taking out weather premium.
Soybeans are slightly higher on spread trade and following some strength in the soybean oil market.
