Cattle, hogs and grains were mostly lower early Friday.
Risk Off Outside Markets Spillover
The ag markets were mostly lower early Friday on spillover from the risk off selling in the outside markets as the money flow continued to spillover. Today the outside markets are reacting to President Trump’s nominee for FOMC Chair Kevin Warsh, with the ideas he is more hawkish and less likely to lower interest rates.
Cattle Markets Await Report
Joe Kooima of Kooima Kooima Varilek says the cattle markets have gotten caught up in that money flow but are also seeing some caution ahead of the USDA semi-annual cattle inventory report to be released this afternoon. He says the market will be closely watching the beef replacement and all heifers categories for any signs of herd rebuilding. Early trade estimates have total beef cows at 100%, beef replacements at 102% and all heifers at 99%.
Cattle Markets Await Cash
The cattle markets are also awaiting cash trade development. Kooima says there was some light trade at $238 live in Eastern Iowa sold to a regional. Bids have also been passed at $237 so he is anticipating higher cash trade this week. He thinks producers will hold out for higher money after cash trade was surprisingly $2 to $3 higher last week.
NWS Headlines
Feeders may have also reacted negatively to yesterday’s state of emergency declaration by Texas Governor Rick Greg Abbott due to New World Screwworm (NWS). Kooima says the market continues to trade headlines or at least the algorythim traders are.
Lean Hogs Just Off Contract Highs
Lean hog futures were slightly lower in the front month on Friday but the summer futures were once again resuming their uptrend. Kooima says the market hit contract highs earlier this week and then saw some profit taking. With the disease pressure and strong consumer demand he thinks the futures will retest those highs. He says cutouts have been staying about 90 cents which is seasonally very strong and an indication that consumers are trading down proteins and picking pork. Exports this week were also huge at 56,000 MT.
Grains See Risk Off Selling, After Hitting Resistance
Grains futures are mostly lower seeing some profit taking as it is end of the month, plus the corn and soybean futures both hit chart resistance on Thursday at the upper end of their trading ranges and failed. Selling pressure is also tied to the outside market money flow and risk off selling in markets like the metals and the rebound in the dollar.
