Grains and cattle are mixed Monday morning, with hogs higher.
Brad Kooima of Kooima Kooima Varilek says cattle are consolidating and the live cattle charts look horrible after Friday’s poor technical action.
He says live cattle need to hold today’s lows or will face even more selling pressure.
However, the break has also been promoted by lower cash and cutouts.
Choice boxed beef broke on Thursday over $6 and then another $1.53 on Friday.
But Kooima points out that it was a function of higher slaughter pace which came in last week at 619,000 head and a larger percentage is steers and heifers now versus cows.
Plus, only 10% of the boxed beef is negotiated and so this is not totally reflective of the market or demand.
Despite that cash broke for the second week with the South at mostly $187 live, down $3.
The North traded mostly $294 dressed, down $3 from the previous week and $186 to $188 live, mostly $186, which is down $4.
Lean hog futures are seeing strength as the funds are record long 116,000 contracts and continue to buy plus cutouts were up $4.42 coming into the session with a $20 rebound in bellies.
Soybeans see follow through buying after a higher day Friday and USDA’s 1.4 bushel per acre yield cut.
However, they quickly come off highs.
He says the market has handled the election and possible tariffs well due to front loaded buying ahead of January 20 but trade concerns loom.
However, he is cautious because soybeans may have a difficult time staging a bigger rally with a record South America crop on the way.
Corn is trying to follow soybeans but has been held back by the sharply lower wheat market as there have been good rains in HRW areas.
