Cattle end mostly lower with live cattle making new highs for the move with record high cash and then scoring reversals for the third time in the last few weeks.
Brad Kooima, Kooima Kooima Varilek, says the chart action is concerning. “There’s an old saying that a market tops on the day the news is the best.”
Cash cattle trade broke during the session at higher levels than last week. The North may have seen new record cash highs after the South traded set a record already last week. Northern cash cattle traded $302 dressed up $4 from last week’s weighted average in Nebraska, with live sale prices $190 up to $193. Meanwhile, the South also hit new highs at $188, which was $2 above last week’s weighted averages.
There was news of a fire at National Beef Packing Co. facility in Liberal, Kansas, at 9:52 p.m. Wednesday evening for a reported box trailer fire, according to the Liberal Police department. However, it looks like damage was minimal and it just delayed operations by four hours Thursday morning. Kooima remarked, “It was nothing like the fire at the Holcomb, Kansas plant, thank God!”
Kooima thinks the possible reversal in the deferred live cattle futures was fear of the bearish placements number in the Cattle on Feed Report at 106.3%. Plus, its end of month and quarter so there could also be some profit taking and even hedge pressure.
Hogs ended lower for a third session. Weekly port exports were decent at 33,800 metric tons but the market has been consolidating and the seasonal drop in cutouts may be a factor.
Grains ended off highs but at least to the plus side. Soybeans closed above $12 for a second day after making new highs for the move. Corn and wheat tried to follow soybeans.
Kooima says it’s a combination of fund short covering as the market nears the end of month and quarter and ahead of USDA Reports including the Prospective Plantings data. However, he also thinks funds do not want to be this short heading into the U.S. growing season as there is some weather uncertainty and the market needs to build risk premium.
Grains ended off session highs so there was some farmer selling that capped the rally.
