Grain and livestock futures are mostly higher early Friday.
Scott Varilek, Kooima Kooima Varilek, says the cattle charts still look good if August live cattle can expire above $178 that will be very positive for the long term continuation charts.
Cash trade so far this week has been light but steady in the South at mostly $183 with some steady live sales in the North, but dressed business was mostly at $292, which is $2 lower.
Varilek is concerned about carcass weights running 24 pounds over a year ago.
High priced feeders and four year lows in corn are encouraging producers to finish cattle to higher weights.
Lean hog futures have been building on a chart breakout this week with buying by managed money traders but can the market keep going?
Varilek says the discount to the futures has been attractive to the fund buyers and producers are telling them the fundamental picture for the hog market is improving in the country.
Corn and soybeans found early strength as the weather has been supportive as well as improved demand for new crop supplies.
Case in point, China bought another 4.85 million bushels of new crop soybeans on a flash sale Friday morning.
November soybeans broke above the downtrend line overnight and December corn is trading above its 20 day moving average early.
Both markets could post a higher week depending on how they close.
However, it is also the end of month so it this just fund short covering or a real trend change?
Varilek says he thinks it could be a bear trap.
