Grain and livestock futures are mostly higher Monday.
The markets have several big headlines they’re digesting including news over the weekend that China and the U.S. are de-escalating the tariff war.
The U.S. will lower tariffs from 145% to 30%, while China will drop their levy from 125% to 10% for 90 days while the two sides work out details of what the White House says is a substantial agreement.
Brad Kooima, Kooima Kooima Varilek, says there is some skepticism about whether China will uphold their end of the deal but the financial and ag markets are trying higher on the news.
Live and feeder cattle futures are also seeing more new contract highs.
Kooima says this comes on the heels of record cash with the South at mostly $220 and the North at $228, up $5 from the previous week.
Packers were buying for delayed delivery indicating they are short bought and trying to get a better handle on inventory.
However, Kooima thinks cash is likely to be higher again this week with the small showlists.
The bigger news came over the weekend USDA announced its shutting the Mexican border to imports of cattle, bison and equine due to concerns about the control efforts on New World Screwworm (NWS).
He thinks this will take a week or two to resolve but points out the numbers of cattle coming across the border from Mexico were only at a trickle and the response may be more muted since this is the second time this has occurred.
Nearby feeder futures continue above $300 a trend started late last week but saw a gap higher opening this morning in reaction to the NWS news.
Plus, Kooima says the feeder cattle cash index is calculated to take a $4.91 jump so that is also fueling the buying.
Lean hog futures are higher with the positive China developments but the response is muted, according to Kooima, as a result of the cooling cash index and prices.
Corn and especially soybeans are seeing a positive reaction to the China tariff news but may also be trading weather and gearing up for the May WASDE.
The trade may question the accuracy of the report numbers for new crop ending stocks due to the developments with China over the weekend.
USDA had stated it would be using tariff and trade deal considerations to determine exports and end stocks for the 2025-26 balance sheets.
However, those numbers may be in question after the tariff reset with China.
