Live and feeder cattle futures open sharply higher on cash hopes. There were 16 deliveries against the February Live Cattle contract and all were demanded which gave the cattle bulls the fuel needed to step back in and buy according to Scott Varilek, Kooima Kooima Varilek. Boxed beef prices were also higher on Wednesday with Choice up 91-cents to $284.98 and weather is supportive with forecasts for snow in Texas that could drop around four inches in feedlot areas. Lower weights were also supportive as dressed steer carcasses were reported by USDA at 918 pounds which is down from the record 942 pound carcass weights before Christmas.
Varilek says feeder cattle futures continue to be the leaders due to strong cash trade. “Cash is hot in the country on feeder cattle and calves at the sale barns because the cattle just aren’t there,” he says.
Lean hog futures are mostly lower despite strong weekly export sales of 39,200 metric tons and that included China as the top buyer at 10,900 metric tons. Hog futures have seen pressure for the last several sessions as speculative traders are in profit taking mode and cutouts have been falling, down $2.24 coming into the session. Varilek says the charts are approaching key support at a 50% retracement level and he thinks that is a likely area where the charts could hold.
Grains are mixed with corn and soybeans seeing some short covering after corn made new contract lows again. Varilek says some of the action is short covering heading into the WASDE. Plus, Conab lowered Brazil corn production by 4 million metric tons and soybeans by nearly 6 mmt. Weekly exports were decent for corn at 48 million bushels, with a flash sale of nearly 8 mb to Columbia this morning. Soybeans exports were weaker at only 12.5 mb.
