Grain and livestock futures are mostly higher to start Monday, except soybeans.
Joe Kooima of Kooima Kooima Varilek says cattle and hogs both saw gap higher openings and are seeing triple digit gains.
Cattle were higher Friday but with sharply higher cash the market is chasing that trade.
Last week trade did not develop until Friday afternoon, with Southern live deals marked at $202 to $203, $5 to $6 higher than the previous week’s weighted averages.
Northern dressed business had a range of $320 to $330, mostly $325, $9 higher than the prior week’s weighted average basis Nebraska.
However, Kooima says live trade also took place at $205-$206, with a few up to $207.
He says packers have been cutting kills the last four weeks to gain leverage but many of these cattle are being picked up already this morning and so that is a bullish fundamental.
Lean hog futures also gapped higher along with cattle but are also trading strong cash trade.
Kooima says shorter supplies have supported the cash market.
The key is keeping the tariffs and trade war at bay with Mexico, which is the top buyer of U.S. pork.
He says a Reuters story that export registrations for more than 1,000 U.S. meat plants granted by China under the 2020 “Phase 1” trade deal lapsed on Sunday, did not have a bearing on the market.
Corn is higher to start following the rally in wheat as that market is putting in weather premium with hot and dry conditions in the Southern Plains and red flag warnings.
Soybeans are lower after a higher close Friday on profit taking and spread unwinding with corn.
Kooima says the corn and soybean markets are already gearing up for the USDA Prospective Plantings report and traders have been spreading the two with corn on the short side of the spread on anticipation of a big acreage increase, while soybeans are on the long side of the spread with less acres.
So, this morning it looks like that spread is being unwound.
He says the grain markets are likely going to trade in a range before the USDA reports and more tariff news at the end of the month, with the deadline again coming up on possible tariffs on Canada and Mexico while reciprocal tariffs could go into effect on April 2 on all countries.
