Corn and soybeans see early strength Friday. Cattle see 2-sided trade early then firm up, with hogs also chopping back and forth.
Scott Varilek, Kooima Kooima Varilek, says cattle continue to hit all-time highs in cash and futures.
Cash trade shattered previous records this week with the North trading Thursday at mostly $228 live, which is up $5 from last week’s volume.
Varilek reports some $230 bids circulating in the North on Friday morning.
Some producers struck deals with packers on Thursday for delayed delivery even into June, which is a sign packers need cattle according to Varilek.
Cash trade in the South this week has ranged from $228 to $221.
Live cattle and feeder cattle futures continue to grind into new highs as they are still at a discount to the cash and August and September feeders have even crossed the $300 level.
So, is there any sign of a top?
Varilek doesn’t see one yet.
“The bull spreads are working and cash is king so until that stops are think we are on solid footing,” he says.
The trade deal announced on Thursday with the UK will have very little impact on U.S. beef exports according to Varilek.
Lean hog futures have continued to struggle this week with the under performing cash index and with uncertainty about China.
Varilek says the market will be closely watching developments out of the meeting in China this weekend.
Indications Friday morning are that U.S. officials plan to lower tariffs from 145% to 60%, which would take effect next week.
Soybeans are also watching the China talks but seem more optimistic about some sort of tariff de-escalation.
The trade is also gearing up for the May WASDE with early estimates for ending stocks showing a flat balance sheet for 2025-26 with the lower acreage figure.
Plus, soybeans saw more value buying on Friday with Pakistan in for 4.4 million bu. of new crop soybeans.
Corn is finally seeing some short profit taking and a technical bounce after an ugly week and new lows for the move on Thursday.
Varilek thinks the funds have been exiting long positions in corn, especially the old crop contracts, with the anticipation of much larger new crop ending stocks in the May WASDE.
The average trade guess on is over 2.0 billion bushels.
Corn has also seen some value buying with another 11.3 million bu. purchase by Mexico, with 3.7 million being old crop and 7.6 million for 2025-26.
