Grain and livestock markets are trading mixed this morning with positioning end of month and quarter and ahead of the USDA reports.
Joe Kooima, Kooima Kooima Varilek, says cattle futures are overbought and due for a correction.
Live cattle made new highs for the move on Friday and are consolidating under those levels.
The funds are long over 52,000 contracts and adding to their long position but may need a bigger catalyst to keep buying he says.
Cash cattle trade was $2 higher in the South and $3 higher in the North last week but packer interest dried up on Friday producing a bit of a correction off the highs in the live cattle market.
Kooima thinks cash trade will be well supported this week with tight numbers in the North and even with formula cattle available in the South.
Lean hog futures have traded two sided but did have a lower weekly close and cash is starting to weaken.
Kooima says this may indicate the market is ready for a correction and is seeing some end of quarter profit taking as well.
The meat markets may also be keeping an eye on the possible port strike in the East and Gulf coasts which could disrupt some product movement.
Corn and soybeans started off lower with some rain chances in the 10 day forecast for Brazil and with some profit taking and positioning end of quarter and awaiting the USDA report.
He says the big question is will the funds keep covering short positions in the grains to start a new quarter if the report is not hugely bearish.
