Cattle and hogs are higher early Monday. Soybeans and bean oil are extending gains, while corn and wheat fall.
Can Cattle Fully Recover?
Brad Kooima of Kooima Kooima Varilek says cattle futures started the day higher in recovery mode after a poor technical close on Friday and a bearish reversal lower for the week.
Cattle markets are seeing some relief from news that President Trump is going to exempt farms and meat processing plants from the ICE raided and deportation orders.
The futures are also getting spillover from the rally in the financial markets which were down on Friday due to rising geopolitical uncertainty tied to escalation of the fighting between Iran and Israel.
Can the cattle markets fully recover from last week’s reversal as it has so many times before?
Kooima says the discount the futures are holding to the cash will be supportive but it will all depend on what level this week’s cash trade develops.
The South was sharply higher last week at mostly $235. However, the North traded mostly steady on a dressed basis at $380 and Kooima says there was even some $240 live sale prices to a major, which was $2 lower than last week’s volume.
“So it will be interesting to see where this week’s cash trade falls out,” he says.
Boxed beef cutouts have continued strong which should prompt higher cash but the key will be if the packers have enough inventory to get through the peak demand for July 4th.
The funds or managed money are also long nearly 138,000 contracts and its unknown if the recent technical action was bearish enough to create more liquidation.
Hogs Make More Contract Highs
Lean hog futures gapped higher on the open into new contract highs, also in response to the ICE news.
The key will be if the markets can continue to move higher now that July is the spot month and holds a signficant premium to the Lean Hog Index.
Can Soybeans Keep Rallying?
Soybeans continue to rally with soybean oil exploding higher on EPA’s surprised increased biomass based diesel blending mandates for 2026 announced on Friday.
The soybean complex is under expanded limits with the limit up close in bean oil on Friday.
Soybean oil gapped higher on the opening Sunday night and as of early Monday soybean is up 350-points.
Kooima isn’t sure if soybeans can get through overhead resistance areas on the charts even with the help of bean oil.
What is the Problem With Corn?
Meanwhile, corn has fallen lower with wheat and is seeing continued pressure from favorable weather and ideas of improved crop ratings in USDA’s crop progress report.
Corn was a reluctant follower of the big rally in soybeans, wheat and crude oil on Friday and has continued to disappoint, despite strong demand.
Kooima says the technical action Monday morning is also ugly as contracts are retesting recent lows.
