Cattle try to recover after a poor technical day Thursday which featured reversals despite record cash trade. So, did this signal an intermediate high?
Scott Varilek, Kooima Kooima Varilek, says the markets often top when the news is the best and this is seasonally when the cash cattle highs are scored. So, he thinks it’s possible that the market may take a breather. He is also concerned about the sharply higher carcass weights compared to last week and last year.
Cash news was solid in the north Thursday with some possible record weighted averages after the dust settles. Dressed prices ranged from $294-$301, steady to $8 higher and the top end went to some regionals. Live sale prices ranged from $187 to $190 which was also higher than last week. The south only traded a few heifers in Kansas at $185 on Thursday and Friday morning is seeing some $186 trade up $1 from last weeks weighted average. However, Varilek says packers are pulling from formula inventory and may not need many cattle.
Longer term Varilek is still bullish on cattle due to historically tight supplies which is driving record fed and feeder cattle cash prices in the country. He says its possible to retest the record highs on the futures set in September 2023 somewhere this year.
Lean hog futures are also higher in recovery mode and with higher cash and cutouts on Thursday supporting prices. However, overall the market is still trading within a range.
Grains also had poor technical closes hitting resistance and failing. Soybeans are seeing follow through selling, while corn is trying to rebound but all the grains are looking for fresh news. Varilek says weather for the planting season, the acreage estimates, and end of month positioning will be the main features for the market moving forward.
