Live cattle futures set back a second day after hitting new near-term highs Monday and failing even though cash was at record levels.
However, Brad Kooima of Kooima Kooima Varilek says he knows of some cash trade as high as $198 in the North and a small regional paid $200, so it was a historical week and is an indication of how tight the numbers are in those areas which gives those producers leverage.
“Compare that to the South which was mostly $186 with some $188 late.”
Negotiated cattle volume was huge as well at 96,000 head.
Feeder cattle futures consolidated with higher corn, but he thinks the live cattle futures correction is just routine profit taking. “I think the challenge in a market like we had on Friday is what do you do for an encore? Do you expect cash is going to be $3 to $5 higher every day? Well clearly that’s not going to happen. So, you’ll have some people saying, I’m going to take the opportunity to take a little money.”
He says he was still encouraged that even on a down day in live cattle the forward spreads were working with the front months stronger than the back months.
The market is gearing up for a Cattle on Feed Report on Friday and even with bullish expectations there is often times caution by the trade prior to the numbers.
Kooima is hoping for a neutral report but says it will likely confirm how tight the numbers are especially in the North.
He is also excited by the news that the USDA is going to reinstate their July Cattle Inventory Report.
Hogs saw bear spreading with lower cash and cutouts weighing on nearby contracts.
Row crops recovered on a technical bounce and with lower crop ratings.
Corn and soybeans both saw a deterioration of conditions by 2% with the Eastern Corn Belt too dry and the Western Corn Belt too wet.
Soybeans did see some forward spreading which may be an indication of strong demand for old crop soybeans by crushers.
