Cattle are mostly lower early after a lower weekly close and softer cash trade.
However, Brad Kooima, Kooima Kooima Varilek, says he thinks this is a healthy correction that could have been expected as it coincided with the end of the month.
“The nagging outside news on bird flu and China delisting a U.S. beef plant due to ractopamine did not help our cause either last week. The market seems to cease on anything that is a little bit negative,” he says.
However, Kooima says the correction was on light volume and declining open interest and the funds have added to their long position in cattle but to get the funds to really get interested in buying he thinks the June contract needs to close above $186.
Technically, the live cattle futures are at a deep discount to cash and holding chart support at the 100-day moving average and Friday’s low. “That’s around the 38% retracement of this last leg up is within 15 cents of today’s low which is at $$177.80,” he adds.
Cash trade was $1 lower in the South last week at mostly $186 and $3 lower in the North at $301 dressed. However, Kooima says he received $192 on some cattle sold late in the week which would be steady.
Hogs continue to struggle and are sold by funds on any strength and after a lower weekly close last week. Funds continue to liquidate their long position and pressure the market.
Kooima says, “I think that this is a money flow problem largely because we are super oversold.”
There is a slight improvement in hog prices in China which is at least a glimmer of hope.
Grains mixed with soybeans lower and pulling down corn. Kooima says the mentality in the row crops is rain makes grain, despite some heavy rains and flooding over the weekend in parts of the Corn Belt.
There is fear of favorable crop conditions in the first report from USDA this afternoon and a few more acres of soybeans with the last of the corn not getting planted.
Wheat is up overnight and early in the session on dry weather in Russia but is fading with row crops as that is getting to be old news.
