Cattle ended mostly lower on Wednesday ahead of the release of USDA’s semi-annual Cattle Inventory Report. It came in close to expectations but showed all cattle and calves at 98-percent, right in line with trade expectations. This puts the herd at 87.2 million and the lowest inventory since 1951. Beef cows, at 28.2 million head, were down 2% below a yar ago. The calf crop was also down 2% at 33.6 million head and the lowest since 1941.
Brad Kooima of Kooima Kooima Varilek says USDA also revised downward some of the numbers from 2022. He says the report came as no surprise as it confirmed continued tight numbers and no herd rebuilding. Kooima says this will be supportive to prices moving forward in 2024. In fact, he is projecting fed cattle and feeder cattle futures prices to exceed last year’s highs.
Cattle futures sold off ahead of the report with some profit taking and positioning, but the numbers should support a higher opening on Thursday according to Kooima as well as higher cash. He says higher bids were being passed on by feedlots on Wednesday.
Hogs started the day with a gap lower open and early weakness on profit taking after running into chart resistance. However, ended mostly higher as funds have been buying on the break. Kooima says the rally has been mostly technical.
Corn saw a slightly higher day with help from higher soybeans and continued short covering off of Tuesday’s reversal from new contract lows. Kooima says there isn’t much new news to support a rally.
Soybeans opened lower but closed slightly higher as well extending gains for a second day on corrective buying. Plus, soybean meal also reversed higher with some warmer drier forecasts for Argentina lending support. Kooima is optimistic that soybeans will be able to stay above the $12.00 level.
