Grains Mostly Lower Pre-Report: Cattle Make New Lows on COF and HPAI
Markets Now Early Markets 3-26-24
Grains are mostly lower early Tuesday except for fractional gains in corn. Livestock futures are mixed with cattle seeing triple digit losses, while hogs have been slightly higher.
Brad Kooima, Kooima Kooima Varilek says live and feeder cattle futures are hitting new lows for the move with the Cattle of Feed bearishness still being digested in the market. He says placements in Nebraska were at 116%, which is a record, and 116% in Iowa mostly due to lighter placements in January tied to the winter weather.
Plus, the cattle market is reacting negatively to the news that APHIS has confirmed High Pathogenic Avian Influenza or HPAI in dairy cattle. "Remember uncertainty is always negative for the cattle market," says Kooima. Even though the food supply is safe there is fear that culling rates will increase and put more beef on the market.
This comes on the heels of record cash trade in both the North and South last week with the 5-area weighted average hitting $189.56 a new record and 81 cents above the previous record set in 2023.
Hogs are higher on the long side of spreads with cattle and gearing up for the Hogs and Pigs Report. The funds bought hogs on the pullback but Kooima says the market is also trading better demand as shown with higher cutouts and a big drawdown in the Monthly Cold Storage Report.
He says corn has been moving sideways and is trading that way preparing for the end of month and quarter and more news from the USDA Prospective Plantings Report. He says the concern is that corn acres will actually be higher than the trade guess and closer to 93 million acres.
Soybeans are seeing profit taking and corrective selling after the higher day Monday, plus end of month and quarter and report positioning.
