Tuesday morning cattle and hogs are mostly higher, grains are sharply lower.
Cattle Make New Highs Despite Lower Stock Market
Brad Kooima of Kooima Kooima Varilek says live and feeder cattle futures are back into new contract and all-time highs after showing considerable resilience last week.
He says the market shook off a negative USDA Cattle on Feed report and news of a human case of New World Screwworm (NWS) in Maryland.
On Tuesday the market is also holding up in the face of a selloff in the equity markets tied to tariff uncertainty.
However, a bigger selloff in the S&P will be watched to see if it can temper the fund buying interest in the cattle market.
Cash Market Strong but Converging
Cash trade was strong again last week with the South trading mostly $242, up $2 from the previous week and the North trading mostly $245 live, which was steady.
However, he says the South is starting to converge with the North due to the tight supplies in states like Texas which have seen several months of lower placements in feedlots, some of it tied to the border closure to Mexican feeder imports.
This week Kooima thinks the cash trade will again be steady to higher.
Cash Feeders on Fire
Helping to hold up the live and feeder cattle futures has been the blazing hot cash feeder market.
Tight supplies have pushed calf and feeder cattle prices into record territory with the most recent feeder cattle cash index at a record $365.23, up $4.55.
Choice Boxed Beef Tops $415
Choice boxed beef was up another $1.00 on Friday and closed at $415.41 but can it keep moving higher?
Kooima is doubtful it can work against the weaker seasonals in September.
Grain Markets Sharply Lower on Tariff Uncertainty
Grain futures are trading sharply lower on Tuesday on profit taking after a nice rally on Friday but mostly due to the risk off tone to the outside markets tied to tariff uncertainty.
The Federal Appeals Court ruled most of the Trump tariffs are illegal and must be rescinded.
While tariffs will stay in place until October 14 this creates general uncertainty in the market.
Plus, there is also concern about a looming government shutdown if Congress can’t get a budget extension passed.
Lean Hog Futures See Fund Buying
Lean hog futures ended higher last week and hit one month highs i the October contract and that is attracting additional fund buying on Tuesday morning.
Will the market be able to continue to move higher?
Kooima says spillover strength from the cattle market has sponsored the rally but the discount futures are holding is also helping out.
