Grains are weak early as well as hogs, with cattle trying to hold gains.
Brad Kooima, Kooima Kooima Varilek, says cattle opened strong with the slightly friendly numbers in the Cattle on Feed Report and a possible cash bottom forming.
He says the report showed on feed at 99.3%, placements at 101.7% and marketings at 101.4%, which looks neutral.
However, Kooima says the placements numbers is extremely small in comparison to last year and it’s the second smallest number for January in eight years.
Placements were smaller in the South due to the border being closed to Mexican feeder a portion of the month, with Texas at only 86%.
On feed numbers also indicated a shift in feeding to the North with Iowa at 102% and Nebraska at 105%, which he attributes to better cattle and more negotiated cash trade.
Kooima says cash improved late Friday with some Northern trade at $201 live after getting as low as $198 earlier in the week.
As a result, he thinks the cash market is getting close to a bottom and that means boxed beef values are as well.
Funds are record long in the feeder cattle at nearly 30,000 contracts and still long 129,000 plus contracts in live cattle, although they shed some of that length last week.
Hogs see pressure after lower weekly closes and follow through fund liquidation and profit taking as it’s end of the month.
The funds are long over 114,000 contracts and increased that position by 11,500 as of last Tuesday.
Lower cutouts pressure the market last week with cash bellies dropping over $30 in three days but those values are starting to stabilize.
Grains are lower early on more tariff talk with the U.S. imposing a fee on Chinese commercial vessels coming into U.S. ports, plus the looming date for tariffs increasing for Mexico and Canada to 25%.
The market is also gearing up for this week’s USDA Ag Outlook Forum and the potential for an increase in corn acreage.
