Grains are mixed Wednesday morning with corn and wheat higher, soybeans slightly lower. Cattle are trying to recover, with hogs also up.
Scott Varilek with Kooima Kooima Varilek says cattle futures tanked on Tuesday with geopolitical and war concerns creating uncertainty and a lower day in the stock market.
That spooked the funds and caused long liquidation in the cattle and caused some short term technical damage to the charts. .
However, cattle are trying to recover on Wednesday with calmer outside markets and the big discount the futures are still holding to last week’s record average cash price of $238.68.
Varilek says there is a chance the lower futures will give the packers some leverage in forcing cash trade lower this week and there has been some light trade at $235 in the South early in the week, at just steady money.
Feeder cattle futures are also rebounding after seeing a $6 to $7 selloff tied to rumors of the border reopening to Mexico but Varilek doesn’t see that happening for weeks if not months.
USDA is announcing additional efforts to eradicate New World Screwworm on Wednesday morning.
Meanwhile, Varilek says the cash feeder market is still red hot and the index has hit record highs.
Lean hogs are trading higher and back into contract highs after also reacting to geopolitical fears on Tuesday and seeing spillover from the lower cattle market.
However, Varilek says hogs are well supported by fund buying and higher cash and cutouts. Cutouts are approaching $120 which is closing in on the highest levels since the July 2023 peak.
Corn is slightly higher, at least in the December contract, following the weather related rally in the wheat market and seeing some short covering heading into the holiday pause.
Soybeans are also easing on some profit taking after running into chart resistance and also seeing some position squaring ahead of markets being closed Thursday.
