Both live and feeder cattle futures saw a short covering bounce Monday and triple digit gains. That followed another lower week last week driven by fund liquidation and fears tied to additional cases of the H5N1 virus in dairy cattle herds.
The cattle markets were oversold and due for a correction. But the big question is can a rally be sustained in the futures?
Brad Kooima of Kooima Kooima Varilek says the market has overreacted to avian flu. However, he wants a close in June live cattle above the 100-day moving average around $176.40 for confirmation that the market has stabilized.
The fed and feeder cattle cash markets have been holding together much better and are at a premium to the futures which is supportive.
Kooima is hopeful for a steady week in the cash trade this week. “We are very current in the North,” he says.
Hogs continued to see fund liquidation and profit taking early in the session. The market has been consolidating since last week’s bearish key reversal, while at the same time funds added to their long position in the hog market.
Grains retreat on farmer selling after the bump in prices, weather and expected fast planting progress in the USDA report.
The grain markets were also removing war premium with the Middle East conflict not escalating to the point some had feared last Friday.
