Cattle futures make new highs for the move pushed by sharply higher boxed beef cutouts and higher cash in the North.
Scott Varilek, Kooima Kooima Varilek says some cash trade broke in the North Thursday at $188-$190 live and $298 to $230 dressed, so up $2-$4.
June live cattle finally got above the $180 level and may have some room to run according to Varilek based on the fact that the futures are at a discount to the cash trade by $10. “That is unusual for this time of year,” he says.
Boxed beef values have also soared this week and were up $3.38 on Choice values on Thursday at $310.15. Prices have soared this week as the packers have cut kills to prop up margins. However, Varilek also thinks demand is strong.
Funds are also regaining confidence with the stock market hitting new highs and bird flu concerns starting to fade.
The one bearish item is still weights, which for steers were up 5 pounds from a week ago.
Hog futures fail with lower cutouts by $1.43 coming into the session and the futures premium to the LHI. While the LHI was up $.37 yesterday at $92.13, a fresh high for the year, the June contract was over $6 over the index on Thursday’s close.
The hogs have corrected nearly $10 off their highs and Varilek says the market has been very choppy and difficult to trade.
Corn is being held back by wheat and needs to hold key support which Varilek says is around $4.54. “That was the breakout area and we need to hold that or we could see the market take another leg lower,” he says. That area also coincides with the 100 day moving average.
Meanwhile, soybeans are rallying with products on continued concerns about flooding in Southern Brazil and talk of tariffs on Used Cooking Oil from China.
