Grains are
lower early Monday as well as hogs, while cattle are higher.
Brad Kooima, Kooima Kooima Varilek, says cash cattle trade was record high again last week with $223 live paid in much of the North and even a few $224 trades to a regional.
The South also traded mostly $218 up $5-$6.
He says some producers pulled cattle ahead that weren’t on show lists with the strong prices and the packers are slaughtering those cattle right after delivery showing they are short bought.
That will continue to give producers leverage according to Kooima.
Futures are at a discount and continue to make new contract highs on both live and feeder markets.
Funds are still piling in to buy the live cattle futures with the CFTC Commitment of Traders report showing managed money traders long 128,840 contracts as of last Tuesday, which was up nearly 8,400.
Plus, Kooima says open interest has been climbing, even in the June contract ahead of the Goldman Roll starting on Wednesday.
His only concern is the boxed beef values have been propped up by packers cutting kills.
Last week’s total was 559,000 head which is down 10% compared to last year and last week’s kill was only 555,000.
Hogs set back on trade concerns with Mexico and China with some bearish developments over the weekend.
Plus, the market was higher Friday and could be seeing profit taking with the futures premium to the cash index.
Grain markets are mostly lower early after lower weekly closes last week especially in old crop corn which was down 16 1/2 cents on the July.
Kooima says the July/December spreads have also lost over 20 cents.
He says it could be the lower crude oil prices, which have dropped under $60, making ethanol margins less attractive.
Plus, there is not a concern about the old crop tightness in corn with 95 plus million acres of corn being planted and favorable weather to start the season anyway.
