Corn and soybeans are higher early Friday, but cattle and hogs start out weaker.
Scott Varilek, Kooima Kooima Varilek, says cattle are down a second day despite more record cash trade.
In the North sales ranged live from $203 to $206 and dressed mostly $322, up $2 from last week but had a range of $318 to $327 on USDA’s mandatory report.
In the South trade developed at $200 to mostly $201, so mostly steady with instances of $1 higher.
The market may be disappointed with the Southern business.
The live and feeder cattle futures made new highs for the move then sold off Thursday despite the record cash and are seeing follow through selling Friday morning.
Is this finally the top or a head fake?
Varilek says, “The answer is worth a lot of money and its hard to tell because the fundamentals are all still pointing to higher prices.”
Cash feeder prices have started to correct according to Varilek and the feeder futures may be anticipating the reopening of the border to Mexican feeder cattle starting next week.
Lean hog futures are lower as well and Varilek says this could be anticipation of a tariff war with Mexico and China, two of the largest pork customers in a market that is so dependent on exports.
Hogs had corrected off their lows this week and the summer months were making new highs, pushing above $100.
Corn and beans sold off Thursday in a risk off session, with uncertainty going into a three day weekend.
However, the row crop futures are trying to recover on strong China economic news.
The the markets are still watching South American weather and possible tariffs on day one of the new administration.
Varilek says the WASDE changed the narrative for the row crop markets, especially corn.
Corn got above $4.80 technical resistance and Varilek is optimistic the market can rally to $5 if demand stays strong.
Soybeans may struggle if the forecasted rains for Argentina and Southern Brazil materialize over the weekend.
