Cattle and hogs are higher early Friday. Corn and soybeans also bounce, with wheat lower.
Cattle Bounce With Steady Southern Cash
Scott Varilek with Kooima Kooima Varilek says cattle futures have seen a choppy week but are higher to start Friday after some better than expected cash trade.
Southern deals have been marked at $240 which is steady with last week while the North has seen a range of $236 to $238.
Varilek says while the Northern cash is lower it is still better than expected.
The cash feeder market has also stayed strong, which he says is also a positive, and the most recent index is at $362.62, up $1.26.
Is the Top in the Cattle Market?
With a higher close on Friday the cattle futures are hoping to post a higher weekly close.
Varilek says if not this points toward at least a short term technical high in the market.
Yet, cattle numbers are still tight and that may be confirmed by Friday’s USDA Cattle on Feed Report and so Varilek is hoping that will bring the bulls back into the market.
Seasonals Lower and Boxed Beef Well Off Highs
Seasonally the market sees higher numbers in this time period and demand can cool as well.
The lower seasonal demand that comes after Labor Day is reflected in the boxed beef values with the Choice cutouts down another $2.37 on Thursday at $385.81.
The Choice boxes have corrected over $30 off the highs just a couple of weeks ago and Varilek says there is finally some sticker shock going on with consumers at the retail level.
He has had reports of some boxed beef orders even being returned.
Lean Hog Futures Bounce But Have Also Topped?
Lean hog futures are up slightly on Friday with spillover from the higher cattle market.
However, earlier this week several of the futures contracts made new contract highs and then put in bearish key reversals which has triggered some fund long liquidation, so that may indicate a short term top.
Varilek says weights are starting to creep up and are currently four pounds over a year ago and cash trade is also a bit softer.
Corn and Soybeans Bounce, But Range Bound
Corn and soybeans are slightly higher after a couple of days of profit taking.
However, Varilek expects the markets to stay range bound through harvest unless there are some big trade developments to move the market such as progress with China.
