Grains are mixed early Friday as well as cattle, with hogs firm.
Scott Varilek, Kooima Kooima Varilek, says live cattle traded two-sided early Friday as the market awaits larger scale cash development with stronger prices anticipated.
The market is watching some weakness in the S&P after three days of recovery plus there is some news a beef packing plant in Grand Island, Nebraska may be unable to operate at full capacity today due to a collapse of a part of the roof in the boxing area.
However, Varilek says that is an evolving story.
Live cattle made new contract highs on Wednesday and again in the April contract on Thursday so with higher cash trade Varilek thinks the market could retest those areas.
The market has been resilient during the correct in the stock market which may be breeding some complacence among producers as far as risk management according to Varilek.
He says feeder futures did not make new highs like their live counterparts but it is only a matter of time.
The CME Group came out with new delivery specs which will allow delivery of cattle up to a maximum weight of 1,650 pounds and the $1.50 discount has finally been removed at the Worthing delivery point.
The weight expansion is not a huge surprise considering the heavier fed cattle weights and that was proven in the monthly cold storage report which showed overall beef production was up nearly 1% from a year ago, despite tighter numbers.
Lean hog futures are trying to recover Friday and with the de-escalation of the China tariff war and higher cash and cutouts.
June hogs are back above $100 and resistance which could attract more fund buying.
Grains are mixed after soybeans made new highs for the move yesterday and both the May and July contracts closed above the 200-day moving average.
Soybeans are easing back but have been supported by news of Japan buying more soybeans as part of their trade talks plus soybean oil has been making contract highs with strong exports and talk of higher RVO levels being announced by EPA this week.
Corn is seeing some light follow through buying after consolidating Thursday but demand is also helping.
Weekly exports have remained strong and Mexico bought another 9.25 million bu. of U.S. corn on a flash sale Friday morning.
Pressure earlier in the week stemmed from positioning ahead of today’s May option expiration and talk of additional acres with fast planting.
