Markets opened mixed on Monday but early in the session turned mostly higher except wheat.
Cattle Firm After Friendly Cattle on Feed
The cattle futures were higher early Monday rebounding from Friday’s lower close and a round of profit taking. Brad Kooima with Kooima Kooima Varilek says the USDA Cattle on Feed report was providing some support. The on feed number came in at 98% of a year ago, placements were at 95% which was below trade estimates and marketings were at 87%.
“Remember this is the second report now that is as compared to when the border had been closed. So the the Texas placement number coming in at 93% that’s 93% of a very small number of the total 98%, again, you get it, right? We’re placing against something that was very small back then. Now, the thing that is a little bit different and consistent with what it’s been is that the two northern states, Nebraska, on feed at 103%. They are easily the number one state now for cattle on feed. Iowa at 100 % on feed. One thing about good old Iowa here, I happen to notice our marketing figure was 115%, which is I’m really glad to see that.” That’s because he was worried some feeders are intentionally feeding these cattle to heavier weights with cheap corn and high priced replacements, plus good weather. .
He adds, “You know that Texas placement number is still 80% of the five -year average to get a little more perspective, even if how that works. So yeah, we got through that.”
Greeley, CO Plant Strike
The other news on Friday was the workers at the JBS plant in Greeley, CO did not strike but the situation has not been resolved. “They got through that first set of meetings on Friday, they’re making steps, but again, this could be posturing. I mean, they’ve set up sign -up sheets. So this is where you sign up if you want to get benefits if they go on strike. So it would seem like there’s some prep on the labor’s part, but again, you know, that can be so much posturing. Of course, they’re killing today.
I don’t know that there’s another meeting scheduled. These negotiations have been going on for more than eight months. So we’ll see. Let’s hope that they strike a deal and we can get on down the road. Any kind of lengthy stoppage there would be
very problematic. That’s a very big plant. JBS’s biggest one or one of their biggest ones at 5 ,400. So hopefully we can put this matter to rest by the time we talk next week, but I got a hunch we won’t. I think this is going to be an ongoing issue.”
Cash Higher Last Week
Cash trade was also higher last week, but for Kooima some what underwhelming as he had talked about the possibility of $250 cash. “I was real confident we were going to have $2.50 up and down the road, you know, or at least, you know, a little more of it. So I shouldn’t say that I’m disappointed. Basically, the north, we ended up with bids of $247, and that would have been one to $2 higher than the week prior. So that’s not so bad. And $247 is still a huge price. Pardon Pardon me, the south,
particularly western Nebraska, did trade some cattle at $249, late Friday. For them, that was actually a $1 higher. So I’d call the cash market still good, but maybe a little bit underneath the expectations.”
He says this week there are a lot of cattle carried over. However, there aren’t big numbers. “If we can keep Greeley out of the news, I’m going to say steady better. I do think that people are, you know, after galloping higher for three straight weeks and then last week’s trade was kind of like, you know, grudgingly higher, a packer that was trying to play a little more hardball. Kill cuts are still very real. I don’t know. I’m going to say steady firm and I hope I’m wrong.”
Tariff Concerns
So is the cattle market at all concerned that SCOTUS struck down the IEEPA tariffs? President Trump put new tariffs of 15% on over the weekend for all but USMCA partners, China and the EU because of the current frameworks. However, Kooima says the market doesn’t like uncertainty so he says the jury is still out regarding the reaction and a lot will depend on whether countries retaliate, plus the stock market reaction.
Hogs Rally a Fifth Day
Lean hog futures are up a 5th day on short covering. However, Kooima is still concerned that the market may have a difficult time rallying because of the big slaughter numbers. “We’re at an interesting spot here right now, you’re right, this fifth day up off the lows. This is 38 % retracement. I got the chart up above me here. Weights are big, cash was crappy on Friday down a couple bucks, product sloppy. It’s too many hogs. I mean, every day that slaughter is so big. We’ve got to have perfect demand, and I’m not sure we do. I think domestic demand is really quite good. Global demand, yeah, you know, not so much. And there, you know, the tariffs talk maybe gets to be something to be worried about, too. I don’t know. There’s a couple
of spots in the charts right here that I think are kind of critical resistance. My inclination would be to think maybe we would fail from here. I hope I’m wrong for the producers’ sake, but I don’t think we’re in a great spot fundamentally on the
hogs here at all, just because of the big supply.”
Corn, Soybeans Higher
Corn and soybeans have faded the concerns about retaliation regarding President Trump’s new tariffs or China back off the extra 8 MMT of soybean purchases as the SCOTUS ruling may have taken leverage away from the U.S. Part of the strength may be due to the Trump administration confirming the meeting between Trump and Xi in Beijing on March 31-April 2. The other factor is soybean oil continues to make new contract highs on biofuels policy hopes.
“I think that that’s really the story there, the renewable fuel initiative here and the likelihood it will be positive. The feeling is that Washington indeed does need to throw a bone here to the row crop crop people, and that would certainly be a good one. So the new contract highs today on the bean oil helps for sure,” he says.
