Grain and livestock futures mostly higher early Friday, except for wheat.
Cattle futures are making for the move highs in both live and feeder cattle futures and some contract and all-time highs as well depending on the month.
Scott Varilek of Kooima Kooima Varilek says the cattle futures are digesting another week of record cash trade.
Cash developed on Thursday at $320 dressed, up $5 from last week’s record prices and the South traded some $200 live, up $4 and there have even been unconfirmed reports of as high as $202 in the South and $204 in the North.
Varilek says as those bids have risen the showlists have too meaning producers are bulling cattle ahead, which is also bullish especially as the tightest numbers are ahead.
He says the futures will stay strong as long as the cash does but one black swan event could cause a big correction and spook the funds causing them to exit longs.
So will the market correct once the border reopens to Mexican feeder cattle?
Varilek doesn’t think so because the numbers will come in dribbles, not waves.
Lean hog futures are also higher for a second day following cattle but also seeing some buying due to growing disease problems.
Corn and soybeans saw some early strength with soybeans being pulled along by a surge in soybean oil as the Biden Administration is expected to release favorable 45Z guidance some time today.
However, the market is also positioning ahead of the USDA reports and he says corn and soybeans will both need some bullish news to continue to rally.
Weekly exports were marketing year lows for corn, soybeans and wheat but Varilek isn’t reading too much into that because it was a holiday week.
Plus, corn exports commitments are still running 30% ahead of last year.
