Grain and livestock futures are mostly lower early Friday.
Scott Varilek, Kooima Kooima Varilek, says ag markets are seeing red with the threat of 50% tariffs on all EU imports starting June 1 and spillover from the lower stock market.
However, this week’s technical action in the cattle futures has been better and the long term uptrend lines are still intact.
Varilek says cash has traded higher with some $230 to even $231 live sale prices paid to a major packer in the North.
The volume has been light so there may be more cash trade that develops but it may not happen until after the Cattle on Feed report.
USDA’s Cattle of Feed numbers come out this afternoon and early guesses are 98.5% on feed, with placements at 96.8% and marketings at 96.7%.
However, he says the report will need to be bullish so the futures do not sell off.
Lean hog futures see additional selling pressure trying to narrow the gap between the futures premium to the cash.
The lower action Thursday was disappointing considering the strong weekly exports and China was in for 8,600 MT of pork.
Grain markets are mostly lower with corn and soybeans seeing some profit taking ahead of a three day weekend.
Those markets have had a nice rally and are also running up into chart resistance.
Varilek says the market has put in some weather premium this week with concerns about planting delays in areas of the Corn Belt and the hot dry extended forecast but he thinks its too early to get overly bullish about grains just based on weather.
