Grain and livestock futures are in the red early Thursday.
Scott Varilek, Kooima Kooima Varilek, says cattle futures are seeing more pressure with some early cash trade at lower money after hopes for steady.
USDA reported some $180 in Kansas on the mandatory report which was $2 to $3 lower than last week’s trade.
Plus, he says carcass weights continue to run well over a year ago adding tonnage to the market and impacting the currentness of feedlots.
He says October live cattle need to hold the uptrend line technically as he says that contract is setting right on that critical point.
Boxed beef cutouts saw big movement on Wednesday with 169 loads traded and Choice cutouts were up 93 cents at $311.60, so Varilek believes demand is still intact.
Lean hog futures are down for a second day seeing profit taking and lower cutouts weigh on futures, so he thinks that rally may have run its course.
Grains are also taking a breather Thursday after a string of higher closes but he doesn’t think the rally is over there.
Varilek says the lower prices have bought some demand and soybean export business to China is coming to the U.S.
China bought 4.6 million bushels of new crop soybeans Thursday morning on a flash tender and unknown destinations showed up for another 7.0 million of new crop soybeans.
However, there were rumors Wednesday of China buying 8 to 12 cargoes off the Pacific Northwest.
Additionally, the U.S. crop size seems to be baked into prices at the same time there growing concerns about the dryness in Brazil slowing the planting of soybeans and first crop corn.
It is still early but Varilek says the forecast looks dry through the balance of September.
