Crude Oil

Diesel Prices Are Breaking Records Across Multiple States, And Relief May Not Come in 2026

Wed, 06 May 2026 12:53:36 GMT

On Tuesday, President Trump stated that high gasoline prices are a “very small price to pay” for the ongoing war with Iran, arguing they are necessary to prevent Iran from obtaining a nuclear weapon. He predicted prices will “come crashing down” once the war ends. But for farmers and ranchers, diesel prices have risen more than gas, putting a further strain on already high input costs for 2026.

Trump on Oil Prices:

I looked today, it's like at 102 and that's a very small price to pay pic.twitter.com/2V8LC93wFj
— Acyn (@Acyn) May 5, 2026

To start the week, diesel prices went on another run with the national average diesel price is just 20 cents away from reaching a new all-time high. And across the country, a growing number of states aren’t waiting to get there. About six states are already seeing the national average price of diesel reach record highs.

From the Great Lakes to the West Coast, roughly a half dozen states have already smashed previous records, as a late-April dip in prices quickly faded and a fresh surge took hold.

“Diesel now averaging about $5.65 a gallon nationally. That is only about 20 cents away from a new all-time record high,” says Patrick De Haan, head of petroleum analysis at GasBuddy . “So even though we had that short-lived break, we’re right back knocking on the door of records again.”

That “break” didn’t last long. De Haan says even though diesel prices saw a bit of a respite for April, with even prices starting to trend down in mid-April, those prices re-accelerated in the last week.

New records for diesel in:
Michigan, $6.01
Illinois, $6.01
Wisconsin $5.67
(Indiana 0.2c/gal away), $6.03
(Ohio ~19c/gal away), $5.93 https://t.co/DV0387vvMR
— Patrick De Haan (@GasBuddyGuy) May 5, 2026

Now, the rally is showing up in state-by-state records, especially in the Midwest.

“Looking at it state by state, Great Lakes states have seen some tremendous refining issues that have really caused prices to rise dramatically,” he says. “Michigan has now set a new all-time record high for diesel over $6. Indiana is just a few tenths of a penny away from setting a new all-time record. Illinois has set a new all-time record. Wisconsin has set a new all-time record.”

And it’s not just a regional story. States in the West were some of the first to not just see the highest prices, but now also hit record levels.

“Out on the West Coast, Arizona set a record a couple of weeks ago, and Washington state is at an all-time record,” he adds. “So there are probably about a half dozen or so states that have set new all-time records, and again, the national average itself is just 20 cents away.”

Perhaps the most telling shift, though, is there’s no longer a low-price refuge.

“No states any longer have diesel averaging below $5 a gallon,” De Haan says. “Texas was the last holdout, and it now is above $5 per gallon. So across the board, $5 diesel is now essentially the floor, and in some areas, that’s actually the cheaper end of the spectrum.”

At the high end, prices are reaching extremes with California’s average diesel price now surpassing $8 per gallon.

Global Tensions Cloud Relief Outlook

With prices continuing to climb, farmers are looking for relief. What would it take to reverse course? That answer remains tied to global uncertainty.

“Relief may be a little bit elusive,” De Haan admits. “It really just depends on the daily developments in the situation between the U.S. and Iran—whether the Strait is open or not, or whether we’re in phases of escalation.”

The Strait of Hormuz remains a critical chokepoint for global energy supply, moving roughly 20 million barrels of oil per day.

“Nothing else matters to the oil market more than this waterway,” he emphasizes. “We’ve seen attacks that have pushed oil prices higher, which in turn pushes diesel wholesale prices up. You may get a little bit of day-to-day relief, but there really is no ‘coast is clear’ until there’s some sort of definitive resolution.”

And even then, he says a turnaround won’t happen overnight.

“If there is a definitive signal to the market, if the Strait reopens and both sides are aligned, prices could start falling within 48 hours,” De Haan explained. “But the rate of decline is likely to slow after that initial drop.”

Prices Likely to Remain Elevated Through 2026

Not only is the rate of decline projected to be slow, but De Haan says diesel prices aren’t likely to drop back to pre-war levels by the end of the year.

“Roughly half of the increase we’ve seen over the last couple of months could come down within the first few months of positive news,” he said. “But the other half could take many more months. We may not get back to pre-conflict diesel prices until late this year—or even into 2027.”

For agriculture, that prolonged stretch of elevated prices carries real consequences.

“When you look at what comes out of a barrel of oil, diesel only makes up about 25%,” De Haan explained. “Gasoline is a larger portion, so it’s been less impacted. Jet fuel, which is an even smaller share, has been hit the hardest. So it’s almost inverse to how much is produced.”

Why Diesel Is Climbing Faster Than Gasoline

If it feels like diesel prices are rising faster and hitting harder than gasoline, there’s a reason rooted in how a barrel of oil gets used.

“Diesel has seen more of the sticker shock compared to gasoline,” says De Haan. “And a lot of that comes down to what comes out of a barrel of oil.”

Not all fuels are created equally in supply. Gasoline makes up the largest share of a refined barrel, while diesel represents a smaller slice, making it more vulnerable when supply is disrupted.

“Gasoline is the top product flowing out of a barrel of oil, so it’s been the least impacted,” De Haan explains. “Diesel, on the other hand, only accounts for about 25% of a barrel, so it’s been more impacted when there are supply issues.”

That imbalance becomes even clearer when looking across the full spectrum of refined fuels.

“The most significant impact has actually been to jet fuel, which is only about 9% of a barrel,” he adds. “So if you look at it inversely—the smaller the share of the barrel, the bigger the impact we’re seeing right now.”

For agriculture, that dynamic matters more than most sectors.

Diesel isn’t optional on the farm. It’s essential. From planting to harvest, it powers tractors, trucks and the supply chain that moves commodities across the country.

“Diesel is the fuel that drives agriculture,” De Haan say. “And that’s why these price increases are so impactful, not just at the pump, but all the way through the economy.”

And while prices are already elevated, the full effect is still working its way downstream.

“Consumers really haven’t even seen the full onset of some of these higher prices yet,” he adds. “That’s going to continue to trickle through in the weeks ahead.”

Demand Holding...for Now

Even with these high prices, so far, demand hasn’t shown many signs of slowing.

“We have not seen much meaningful decrease in demand yet,” De Haan says. “We’ve seen very little, if any, diesel demand destruction so far, which tells you the economy is essentially preparing to pay these prices because it still needs the fuel.”

But there are warning signs ahead.

“If diesel nationally hits $6 a gallon, that’s likely when we start to see consumption slow,” he says. “For gasoline, that number is about $5 a gallon. We’re getting very close to those thresholds.”

Until then, the pressure continues to mount. And for farmers heading deeper into the growing season, that pressure is becoming harder to ignore.

Has the Cattle Market Finally Topped on Fear of Border Reopening? Grains Fall as Strait Opened

Fri, 17 Apr 2026 15:54:44 GMT

Markets started Friday lower except for cattle but after 10:00 am Central Time the cattle futures tanked.

Cattle Bounce Early
Cattle futures were slightly higher early on Friday in tandem with the stock market soaring into record territory and plunging crude oil futures with word the Strait of Hormuz has been reopened.

Scott Varilek with Kooima Kooima Varilek says that provided and early bounce for cattle after two down days tied to profit taking but then the market crashed.

He says with prices at record highs the risk is high.

“We’ve got an on-feed report coming up with 100% on-feed estimate, and we are $50 higher than where we were last year on the same cattle on-feed. So we’re at some impressive levels here, Michelle.”

Is a Top In the Cattle Market?
The cattle market was overbought which triggered some profit taking and with futures tanking on Friday it will confirm a lower weekly close and reversal off of record highs.

So will that also confirm a top in the cattle market?

Varilek says, “That’s going to be the question here because it it looks like hey look at the time of year we’re in we’re at the time of year we can put a high in charts almost look like it you know we drove through make contract highs closed all the gaps and then what was the encore not much we drifted a little bit lower. So, for about the you know 75th time we’ll try to call a top in this market but it I don’t know that we want to try to do that it’s just the potential is there for it you know,” he says.

April live cattle futures did get over $250 and the contract was slammed with a bunch of deliveries as well which is bearish.

“We’ve got 20 deliveries and three retenders on the market so we are just seeing that starting to act a little bit more sloppy here,” he adds.

Line in the Sand for Funds is $243
The line in the sand on a technical basis for the funds to defend their longs is $243 on the June live cattle chart says Varilek.

“Funds don’t sell highs. They don’t buy lows. Once the chart starts to flip and their signals start to go off, whether it’s crossing moving averages, whether it’s coming off of being overbought, then they start to unwind positions. And it kind of sounds like around that $243 area on the June is
the spot that they’re looking at,” he says.

As of mid-session that low had held but for how long?

“There’s the old saying never be short June cattle in the month of May. Yes we’re in different times now you know it’s going to be wild as high as we are but that’s that’s how the market could feel so long story short $243 is a spot that I would think that we need to hold for that,” he adds.

Fear of Border Reopening
Fundamentally what has spooked the market is the fear of USDA announcing the border reopening as Secretary Brooke Rollins will be announcing the ground breaking of the New World Screwworm facility in Texas on Friday morning.

The fear is she could also announce the resumption of Mexican cattle imports.

Varilek says, “I mean, will there be an announcement? Will there not? We’re just kind of all hands on deck, kind of watching and wondering what she’s going to say. So going down for some groundbreaking of the facility. But you just would expect that she’s going to say something.
Okay. What kind of plan are we going to softly open a port and get some cattle coming across? And I think that’s what we’ve been talking about for a couple of weeks. So it’s not brand new, but I think that’s our expectations is that she will say something.”

He thinks the timing is odd as the weather is getting warmer which more easily allows the fly to migrate North versus the winter time.

However, it won’t be as big of an impact as feared due to the staggered reopening and the fact Mexico has developed its own feeding capacity.

“You know, they’ve been able to kill the cattle down there and ship the meat up here. So they may not be as eager to send near as many numbers as what they had planned before. So I feel like it’s negative to the market, but maybe not as negative as it probably used to be months ago.”

Cash Disappoints
Cash trade also developed on a light basis on Thursday at $248 live and mostly $388 up to $342 dressed, which is steady money with last week but a disappointment to the market.

“I mean, it was last week. It was these $248 bids and only one regional out there getting some $250, maybe a little disappointing. And I think everybody wanted that round $250 number so we could just feel good about it. It would have traded if it hit. Packers really dug their heels in and they’re sitting at $248. And now we have some sloppy trade this week. A lot of $248 starting to trickle around. I know several people have taken it and a couple dollars off of $250 is still a great price. These cattle are going to probably make some money up here because we’ve got extra days on feed. We’re making them bigger. Hard to say pass on that.”

Cattle on Feed Report
The market was also seeing some positioning ahead of the USDA Cattle on Feed report which is expected to be somewhat bullish.

The on feed estimate is 100%, placements at 93% and marketings at 94%.

“The South placements are going to be much lower and that’s, what’s really pulling this down. So, so that feels okay. You know that, Hey, when we’re. We’re still seeing the tight numbers, the on-feed number.”

Next month that could change as some of the feeder are being moved off grass and wheat pastures early due to drought.

Feeder Cattle Cash Index Hits Record High
This week the feeder cattle cash index hit a record high of $379.09 which is also supportive.

“That’s been strong. And feeders have been what’s bailing out this market. You know, that’s still the case.”

Lean Hogs Make New Lows
Lean hog futures are down a 9th day and making more new lows for the move but will the market find support soon on the charts?

Varilek says, “Hogs are trendy and it’s making a third leg lower. So Elliott Wave people, chart people, you might look at that and wonder, okay, so when it holds, you almost need to wait for that confirmation before you can kind of really jump into that market. Let it trend lower here. I think that cash and cutouts have been a little bit sloppy here looking for that to get better I think here rather soon.”

He bases that on the disease issues in the herd and eventually that will produce a marketing hole.

Grains Tank as Strait of Hormuz Opens
The grains are all lower on Friday taking out war premium with the Strait of Hormuz opening back up.

Varilek says, “Crude oil down $10 here today. Grains did put a little bit of premium on for that, and now we’re just taking that off. The equities are impressive how they can rally on back. So, as of now we’re feeling this war is going to stop or get better but not super confident. And wheat could not take out the April highs so it saw some profit taking and so is the rest of the grain complex.”

Live Cattle Follow Skyrocketing Cash, JBS Plant Strike Ending: Hogs Rally on FMD in China

Mon, 06 Apr 2026 19:52:16 GMT

Live cattle were higher feeders two sided with hogs sharply higher early Monday. Corn and soybeans were trying to hold gains as wheat fell.

Live Cattle Hit Contract Highs
Live cattle were higher early Monday with deferred contracts making new contract highs.

Brad Kooima with Kooima Kooima Varilek says the futures are chasing sharply higher cash trade from last week.

Cash Skyrockets
Cash trade was higher on Thursday at $245 to $246 in the South, up $8 to $9 and the North traded $245 live and mostly $385 dressed, up $13.

“Absolutely this cash market even with the Greeley plant being closed and even with all the uncertainty going on with the geopolitics and all the other stuff cash was basically $245 in fact there was some $246 bid around here on Saturday, the day before Easter. So that’s pretty impressive.”

He says show lists are very tight in the North, weights are falling and the backlog of big cattle has been worked through.

“Now all of a sudden you’re in between crops of cattle mostly the yearlings are gone and the calves aren’t fat yet even though the weather has been ideal.”

Cash Higher Again This Week?
So will cash trade be higher again this week with feedlots regaining leverage?

Kooima says, “I think yes. I think most everybody’s kind of got $250 in mind this week, and I think we’ll get it. And it’ll probably be led by the North. So it’s kind of weird to me how the packer really lost his leverage last week.”

He adds that the market has already exceeded his expectations and could shoot all the way up to $260 before it runs out of gas.

Greeley Plant Strike Over?
Over the weekend the strike at the JBS plant in Greeley, Colorado ended and so the plant will be killing cattle on Tuesday according to Kooima.

“I think they might get 3,500 cattle dead tomorrow as the union has agreed to go back to work and while they continue to negotiate. So not unexpected. We kind of heard this was coming last week. But of course, that’s going to force that outfit to have to buy a few cattle, we think anyway. And then that should help press the thing toward $250.”

The union went back to work despite their demands being met but Kooima is fairly sure the strike is over for good.

“The back story of this had been that, well, this is a deal, an agreement that all their other plants had already signed on to. And so, you know, a lot of us on the sidelines were thinking like, well, what do you expect JBS to do to make a different deal for Greeley? You know, maybe there’s some small concessions with some benefits or something, but to say that they were going to reopen that whole thing. And then of course, you know, the union leader has of this particular union has a reputation of, enjoying strikes. And so, you know, you wondered about it. I would say that you can’t completely say, okay, no worries at all. But for me, I’d be, I’d be 80% sure that they’re probably back to work to stay,” he explains.

How Long For Greeley to Return to Normal?
So how long will it take to get Greeley back to full capacity?

Kooima says, “I’m guessing, but the boots on the ground there, they think maybe, you know, capacity is 5,400. But I don’t know if there’s a plant
in the universe that’s killing it capacity with this tight supply. The talk was that they maybe could get back to where they were, which is around 4,800 to 5,000, maybe as soon as two weeks. So we’ll see. Probably depends on the margins and the profitability, too. That’ll probably incentivize them, give them a lack of incentive to get real aggressive if the packers kind of lost his margin here on this last last last move here.”

Feeder Cattle Sloppy Fearing Border Reopening
The feeder cattle market has not made new highs like the live cattle and it fact Kooima says was trading two sided and sloppy on Monday.

It is likely the fear of the border reopening to Mexican cattle and USDA Secretary Rollins has changed her stance when that event will take place and retreated on how much of threat New World Screwworm (NWS) is to the U.S. cattle herd.

So, Kooima says its more likely within the next few weeks.

“Personally I am really tired of this deal. I think they’ve made so much out of it. This is something that’s treatable. This isn’t mad cow disease. This is a worm. Ever heard of IVAMEC? So her narrative changed in that they think maybe now it’s time to do a gradual reopening. They’d
start way on that west one there, Sonora, the one in New Mexico. They’re 800 miles literally from the nearest incident of screwworm fly.”

However, he says the Mexican cattle industry has built feed yards and packing capacity and is making money so the number of cattle coming across the border may be less than expected.

“They’ve tripled their kill capacity because they’re killing cattle 24-7 instead of eight hours a day for five days. So we may never go back to where
we were. In fact, I doubt very much that we ever will, you know, back to that 1.3 million head a year. But for my money, I don’t know. I think I’d just soon know where they are instead of having to absorb all their meat into our consumption and wondering exactly what it is. But that’s just me,” he says.

Plus he says the market has rallied $23 in three weeks and filled the chart gaps, so it is overbought.

Hogs Rally on FMD in China
Lean hog futures were also higher on Monday with news that China has cases of Foot and Mouth Disease in two provinces.

Kooima says, “Those kind of headlines really will spark it. Obviously, China has been noticeably absent from our export business here because it feels like they’ve got their whole industry back, you know, through their disease cycle and after low productivity, high productivity. Now, I don’t know if FMD is necessarily quite the like PRRS risk or, you know, all this other stuff. But yeah. For now, it’s given us a pretty good headline bounce.”

He adds that disease problems in the U.S. herd are also causing the feeder pig market to rally.

“Everybody’s talking about the disease problems here in the United States as well. PRRS, some new strain. It seems like it never fails. You can only go a year or two before something else happens. So I know these guys that are buying feeder pigs are really chasing the market.”

Corn, Soybeans Struggle to Hold
Corn and soybean futures are struggling to hold slight gains with the wheat market lower and uncertainty tied to war headlines and the energy market looking for direction.

“If you’re bullish you better hang your hat right on that post because that’s I don’t see a lot of other stuff to hold the market except what the weather is going to be this summer and nobody knows what will happen with that,” he states.

Seasonals are a little stronger during the planting season but he says the cash basis levels on corn in the North are weak even around ethanol plants.

“Basis is really weak 40 to 50 under tells me there’s all kinds of old crop corn left. So, let’s give it a chance here the next two weeks let’s hope we bounce a little bit,” he adds.

Cattle Rally on NWS, Cash, Technicals: Will Cash be Higher This Week?

Mon, 30 Mar 2026 15:28:49 GMT

Cattle and hogs were mostly higher early Monday, with soybeans higher, corn lower and wheat mixed.

Cattle Futures Extend Grains
Live and feeder cattle futures were extending gains on Monday after higher weekly closes. For the week April live cattle were up nearly $4.50, June was up $5.25 with May feeders up $13.45 and August up $11.67.

Brad Kooima with Kooima Kooima Varilek says the rally late last week was impressive considering the equity markets were sharply lower on Thursday and Friday plus crude oil was higher.

What Drove the Rally?
He says the rally was driven by a combination of factors including a strong chart pattern which prompted some technical buying.

“I did not see Friday coming. I was surprised. A lot of that, you know, what you quoted for the week, an awful lot of that, especially on the live cattle, happened on Friday. Of course. feeder cattle futures were up a lot too which was part of the market. However, when you whip the horse it better run and we could have easily been lower Friday with the stock market sharply lower and with the lack of cash trade.”

He says the past futures rallies had been led by cash but this one was not.

“Instead this time it seemed like the you broke out of basically both flag type formations on the fats and the feeders and then you prompted either short covering, because open interest was no runaway, but I would suppose at least some fund buying in the deferreds. The funds don’t trade something that’s ready to go under delivery like the April, so the April was kind of under performing. So I think technical buying,” he adds.

Cash Cattle Steady to Higher
Cash cattle traded steady to higher on Friday as a result, which was also impressive according to Kooima.

The cash was slow to break but in the North the trade was mostly $235 live, which was steady. Then after the futures closed the South broke at $238, up $3 from the previous week.

“I thought it was going to maybe take a little longer. I thought it might take into the middle of April. And then I really agree that, you know, the supply of cattle here going into that second quarter slot is tight. And nobody’s going to be in a big hurry to sell a calf that’s barely fat in April or May. Maybe we just cleaned this thing up a couple of weeks earlier than I thought, which is awesome,” he explains.

Higher Cash Cattle Trade Again?
Show lists are fairly tight in the North and the bigger cattle have been cleaned up so will the cash be higher again this week?

He says it is possible as packers are starting to buy for the best demand time of the year for beef. “Yes, I think cash will be higher this week, whether it’ll be galloping higher like we sometimes get, I don’t know. I guess I do think we are going to maybe put some $240s hopefully up on the board next week or this week rather for cash. And then we’ll see once if we can maybe work more to those mid $240s here in the next couple of weeks after that. So I do like the way the cash market feels barring something else.”

However, he says Greeley is getting closer to a settlement which could have an impact. “I guess I’m trying to say it feels like the
toehold that the union has is starting to weaken, you know, in another week. Looks like maybe we’ll see or hear something in terms of a settlement there. So, you know, that bad news should be in the market. The Cargill talk about, you know, whether Fort Morgan was going to join that strike, that seems to have died down.”

NWS Case Pushes Feeders
Kooima says also pushing the feeder market on Friday was another case of NWS that was only 77 miles from the U.S. border.

USDA Secretary Rollins has said the border would stay closed until those cases started rolling back and further away from the U.S.

“Whether it’s a combination of these headline trading algorithms that react to those kinds of things or just to the reality of, holy cow, we thought we were winning. We thought we were pushing it back. This is what Secretary Rollins said has been necessary if we’re going to ever open it, that we need to see this thing in retreat. Now, we’re not too far from having that next factory of sterile flies operational, I understand. But yeah, I would guess too that that probably was, I mean, why else do you all of a sudden go up $7?”

Kooima adds that the cash feeder market has also been strong at the sale barns.

Hogs Trade Bullish Report
The lean hog futures are showing early strength on Monday after June and the deferred contracts closed higher for the week on the heel of the bullish USDA Hogs and Pigs Report.

Plus, Kooima says disease problems are ramping up and technically the market held support.

“Looking backwards the last two or three weeks, I liked where we held. We’d had a big correction. We’re still a long ways off the highs, even though we’ve had a couple of nice up days. Held at the 100-day. A little reinforcement on a hog report as the USDA continues to kind of amend, catch up to the shorter numbers with some revisions again. And just this morning, I’m talking to someone that I have a high amount of respect for in the hog thing, talking again about another part of the country here that just broke with a real hot strain of PRRS with an 85% mortality or something like that.”

That is fueling buying in the summer months, plus he says domestic demand has been strong due to the price point of pork and Easter ham buying.

Soybeans Follow Oil, Corn Eases
Soybeans and corn were lower on Friday fading the record levels reported in the RVOs but soybeans are back up on Monday with bean oil.

Kooima says bean oil is getting a push from $100 crude oil and sharply higher diesel fuel markets.

However, he likes the look of the charts and the seasonals are favorable.

“This is typically. where you get some movement between now and when we plant. But I also, you know, a little heads up, you know, this is where you start to kind of pick some targets here a little bit above us and start to do a little bit of pricing here.”

The other key is the market needs to get through the big USDA reports.

“And that’s there’s plenty of info on this report. On the one side, we’re going to get reminded about just how much corn we’ve got left over, especially compared to a year ago. My goodness. But on the other side. We’re going to, you know, let’s get dialed in just how much less corn are you going to plant. It’s not whether it’s going to be less than last year, how much less. With that average trade estimate, you know, in that 94 to 94.4 range or something like that. If I had to guess it, I would guess it would be even a little bit less than that. But we shall see,” he remarks.

Cattle Higher Fading Lower Equities, Hogs Rally on Report: Corn, Beans Ease

Fri, 27 Mar 2026 15:56:10 GMT

Cattle and hogs are higher early Friday, with grains mixed.

Cattle Extend Rally Despite Lower Equities
Live and especially feeder cattle futures are seeing follow through buying and a strong rally despite lower equity markets and higher energy prices, which are usually negative for the market.

Joe Kooima with Kooima Kooima Varilek says the ability of the cattle market to divorce itself from the outside markets the last two sessions has been very impressive.

“We had a really good finish yesterday and that’s kind of setting the stage for today. We’re having a fantastic start. Feeders are up $4.50, fats up $2 or more. You’re still having an outside market that’s a little bit clunky, a little bit squirrely here, especially on a Friday going into a weekend. We don’t know what’s going to happen with any war escalation or anything like that. So I’m highly impressed with the cattle action so far. And I’m glad that we can finally have a little bit of a divorce between the two and maybe look at
some fundamentals that could be coming around the corner there.”

Steady Cash Supportive
Thursday the fed cash market started to develop at steady money so that is likely supporting the futures he says.

“Yeah, I would call yesterday a big victory. We look at the last couple of weeks, our kills were light. Like yesterday was just 96,000. Last week’s kill was like 508,000 or something like that. It’s great to see because we’re worried about you know how big these cattle are, we’re worried about the last couple weeks we’ve carried some cattle into the next week because we didn’t sell as much. Yet you’re seeing a market that is holding,” he says.

Cash bids on Friday were also holding steady with Thursday’s cash trade at mostly $235 in the North with dressed prices at $370 to $372 and a few in Texas at $234.

Kooima says, “The packers got a little bit of an appetite here and the producers can kind of smell it. So futures are responding pretty well. So this leverage hopefully is shifting back into the producers hands right now.”

Futures Absorb Lower Boxed Beef
The futures are also holding despite the drop in boxed beef values the last few days and he thinks the market will continue to shake it off.

“I think we can. The relationship between the boxes and cash in the last several years has always been tough to tie the two together. You’re having cattle that are on feed a little bit longer. Our grading is the highest it’s ever been. So part of the equation there too is like, hey, we’re probably swimming in a lot of prime and a lot of choice product out there that’s having maybe a tough time having a lot of movement at the prices there. But I look at the calendar. We’re a few weeks out from having a big spring demand push. Maybe these packers just had to back it up. The price level is just to get a little bit better start on the price and not have such a high price going into a big spring demand event because basically these boxes are the highest they ever have ever been if we take out that COVID year.”

Technical Breakout in Cattle
Cattle futures also had a technical breakout this week according to Kooima.

“We kind of broke out to the top side at the beginning of the week, and the feeders took out their down, just a smaller downtrend line. The cash market continues to be hot there as well, and the fat cattle followed there as well, took out a small term downtrend line you have a little bit of a wedge of formation happening in so you’re getting some technical buying upon that and if you measure you know that that nice technical outbreak that we had at the beginning of the week it’s almost looking like we can go back, fill that gap that we left a couple months ago so you’re looking at that $240, $239 marker for like June,” he explains.

Greeley Still on Strike
Kooima says workers at the JBS beef plant in Greeley, CO are still on strike but non-union workers have been slaughtering about 400 to 500 head daily.

“They’ll actually be selling some boxes out of there next week so not enough to really you know matter a whole lot but hey if they’re dropping some blood over there maybe some maybe we’re closer to seeing some kind of a negotiation moving forward too,”

Hogs and Pigs Report Friendly
Hogs are mostly higher on Friday with a push from a friendly USDA Quarterly Hogs and Pigs Report compared to expectations with the All hogs and pigs number at 100.4%, kept for breeding at 98.5% and kept for marketing at 100.6%.

“We came back a percent less and majority of the numbers there. And you’re having that into a break of $8 on the board here too. So it’s kind of a good timing aspect for it as well. Does that hog and pig report show exactly what’s going on out there in the real world? It doesn’t reflect necessarily what I hear, but at least we had something to kind of hopefully switch this this quick downtrend that we have and that was a just nice timing overall.”

The 98.5% kept for breeding number was a well under expectations he says. “We’re going to be in a new landscape moving forward and you know what these operations are going to be looking at moving forward. You hear here a few sow barns here and there they’re
just old and the producers are just going to be moving on to something different there. So I think we’re a little bit into that phase,” he says.

USDA also did some revisions to past reports based on slaughter numbers and weights.
but it was actually down from the last quarter, wasn’t it? I believe so. I think there’s a few

When Will Disease Start Showing Up?
When will the reports start showing the marketing hole from disease problems?

Kooima says the disease issues are as bad or worse than in past years. “The prevalence on some of these, the PRRS and the PED. It’s been the highest, you know, some since 2018 for some PRRS issues. And the fourth quarter of last year for like PED was the highest it’s been since like 2023. So we’re talking about a very high benchmark.”

So he thought the disease problems would have already shown up in the form of tighter numbers. “But I think we filled a lot of those flows back, you know, six months ago when we had major disease issues from Canada. So I think that’s a little bit telling story of why
our kill numbers are maybe a little bit more than a year ago.”

Moving forward he’s hearing of packers killing Saturday kills in April which is friendly and indicates tighter numbers. The weights this week finally fell below last week and a year ago.

Funds Still Liquidating
Unfortunately, he says the funds are still liquidating in the hogs and indicated by the dropping open interest. “It was sitting at like 380,000 in the hog complex and I think we lost about 45,000 of that. So that’s one of the reasons why we saw such a big... downtrend here and cash and cutout have been sideways too. So you had a pretty big premium,” he adds.

Corn, Soybeans Under Pressure on Profit Taking
The corn and soybean markets are lower on Friday morning seeing profit taking heading into the weekend on fear of war developments. The market has also rallied anticipating the RVO levels being announced on Friday.

However, Kooima says the row crop markets are seeing buying on the pullbacks. So even if there is some buy the rumor, sell the fact reaction to the RVO announcement, he thinks the market will be well supported due to inflation concerns.

Inflationary Buying
Kooima says with rising energy prices that is fueling inflation concerns which is supportive of the grain markets.

“And I think that’s why you’re seeing the funds take on these little dips that we’ve seen this week. They’re building a long position. They have a nice long position ready, well over 200,000 for both corn and beans. And I think they’re looking to add to that on any kind of a
break there. So if we do have kind of a buy the rumor, sell the fact, I think it’s going to be met with some buying.”

Longer term he thinks higher oil prices will stay high due to the infrastructure damage in Iran and that will continue to support inflationary buying.

Cattle Rally with Equities, Fade COF Report: Grains Fall with Crude Oil

Mon, 23 Mar 2026 16:24:19 GMT

Cattle and hog futures were mostly higher early Monday, with grains mostly lower.

Cattle Follow Equities
Cattle futures are higher early following the big rally in the equity markets and fading the USDA Cattle on Feed Report.

Scott Varilek with Kooima Kooima Varilek says the financial markets are up and crude oil is down following President Trump’s post this morning that the U.S. is postponing a strike on Iran power plants and energy infrastructure for 5-days, signaling a de-escalation of the war.

The cattle market has been ebbing and flowing with the S&P and crude oil so the positive move gives traders some confidence that consumer demand for beef will hold.

Cattle Absorb COF
The cattle market was also absorbing the USDA Cattle on Feed Report numbers from Friday with the one feed total at 11.55 million head and at 99.7%, placements at 103.7% and above estimates, with marketings at 93%.

Varilek says the placements number though is being compared to some of the tightest cattle numbers in history and a time when the border was closed to Mexican feeder cattle.

“We’re comparing to a historically low number the year before and we break it all down 40,000 head extra placed is not as big of a swing as you’d actually think,” he says, “We’ve soaked up a lot worse news, I think, in the cattle market than that.”

Some of the extra placements likely came from drought and the need to place some cattle with the wildfires destroying grazing areas he adds.

“Cow-calf country is looking pretty dry right now and in pretty much an expanded area. Last year, different tone. We had some moisture. We were feeling good. It was a nice shot in the arm and now looking pretty dry to start the year. We need to see some rain, some thunderstorms start to move across. We’ve got the wildfires. I mean, that’s been kind of a headline, but even before the fires, I think that was already a story, just how dry we’re looking.

“But with a stock market this strong today, I think that’s what’s winning over in the cattle market. Maybe easing these energy prices consumers can start to feel a little better.”

Steady Fed Cash Trade
The futures already rallied on Friday despite a lower stock market being pulled up by mostly steady cash trade in the fed market.

Varilek says he is surprised to see steady cash with the heavier weights the cattle are carrying.

“I think that was the surprise that we did get steady cash. Now, we say steady cash, and that feels good to say, but it’s not like we have all of the packers out there beating down doors looking for cattle. It’s still slow moving. Our kills are still very slow. You know, we’re off the pace. You think maybe they’re really going to pick up some chain speed, and they don’t,” he explains.

Varilek says Greeley killed about 350 head on Friday but there is no word that the strike has been resolved at the JBS plant.

“They’ve only just killed a few hundred head here and there is all that we’re hearing just with some of their workers that are showing up. And it’s not like we have a good source of information for what’s the future there, what’s happening, is there any headway? Don’t know yet,” he states.

Cash This Week?
Varilek is hopeful cash trade can hold this week with some increased packer demand.

“There’s still a lot of optimism that hey demand is good packers are going to need some cattle we’ll get really going again by then and packers are going to be out in the market. So, it’s only been you know one or two packers long story short last week that we’re in hard enough to matter but guys were able to get some sold and take some bids because our show list did grow here a little bit in the north as we’re starting to carry over some cattle. So anytime you see some move, I think that just makes you feel just a little bit better.”

The caveat is packers have slowed kill to only 508,000 head last week, so producers are still working to get their leverage back.

However, he says packers are seeing some black ink with higher boxed beef values and demand ramping up for the grilling season.

“So I feel okay about cash yet because I think that there’s some packers that haven’t bought a lot of cattle and they are going to want some.”

Can Futures Break Through Resistance?
In this volatile environment Varilek says the technicals are not providing as much clear direction.

“I think we’re all reaching for what we can look at. Where can we draw some lines? We know that we’ve had this large uptrend and the long-term charts are still safe. It’s what can we do? Can we hold some of these levels here at the $230? If we start slipping under $230, does it get a little sloppy? We tried to form a little downtrend line. You know, trying to measure off of that. We kind of broke that. So we’re moving so erratic every other day that it’s kind of the market that stops get filled either side of the market. So I haven’t found a technical that’s just saying, hey, this is what we’re trading off of right now,” he explains.

Hogs Bounce But Funds Have Been Liquidating
Lean hog futures are up with cattle and the stock market Monday.

However, the futures have seen some long liquidation by the funds recently with the poor chart pattern and that caused a big drop in open interest.

“So the funds were heavy longs in that market and really unwound quite a bit last week during all of the outside market noise that we’re having,” he says.

Fundamentally though the market has been trying to price in lower numbers tied to disease and there is news circulating that packers could be cutting Saturday kills in April which would be positive.

“Kill cut in hogs will rally that product and and that can be tied to that contract in their formula that they have so might be okay that might help push this thing back higher,” he adds. He thinks that could push hogs back to test $110.

Hogs are also awaiting the Quarterly Hogs and Pigs report. The last report was bearish and so Varilek says there could be some nervous positioning ahead of that.

Grains Fall with Crude Oil
Grains futures were slightly lower early Monday in tandem with the correction in the crude oil market.

“Yeah, that has to be the lead indicator here with the energy markets much lower. It’s not like the greens are doing anything too wild today, just maybe a little correction,” he says.

However, as the market gets closer to the USDA acreage and stocks data at the end of the month, Varilek thinks the focus may shift away from the energy markets.

Cattle, Hogs Fall With Equities: Corn, Soybeans Lifted by Crude Oil

Thu, 19 Mar 2026 15:43:29 GMT

Cattle and hogs were both lower early Thursday. Corn and soybeans were slightly higher with wheat lower.

Cattle Futures Correct
Live and feeder cattle futures were lower early Thursday. Joe Kooima of Kooima Kooima Varilek says live cattle had three higher closes and finally got above some chart resistance on Wednesday.

However, the futures are trading back below that area with the weight of the lower equity markets.

“This last week and a half, we’ve been tied to the equity market. You can almost put a chart of crude oil up and the stock market lower over there. And that’s usually how the cattle market will go in the morning. And it’s been a lot of gaps, whether they’re lower or higher. But I do think we have a little bit of a two tiered approach in the cattle. Yes, equities lower this morning we have the war rhetoric a little bit higher especially later afternoon yesterday, so that is the culprit,” he explains.

Into Chart Resistance
The futures are also into chart resistance.
“You can draw a little bit of a downtrend line on feeders and fats we hit our head on there on Tuesday. Then yesterday we hit it a few times and had a pretty good close. But unfortunately with the equities doing what they’re doing now you have a chart that looks a little weak that we couldn’t propel up through that downtrend line,” he adds.

Feeders Watch Corn and Cash
The higher corn market has been a slight headwind for the feeder cattle futures as well as the risk off in the equity sector but Kooima says cash is moving back higher in the auction barns which is supportive.

“This week also you’re seeing southern barns $8 to $10 higher, as much as $15 higher. So, I think that’s just the number situation in the tight supply,” he says.

Higher Fed Cash This Week?
Fed cash has been non-existent so far this week and may not trade until after the Cattle on Feed Report Friday.

Kooima says last week cash was $5 lower as packers had the leverage with their kill cuts, but the volume was light and show lists were carried over. So far packers have not used the heavy weights against producers, so he is hoping packers have to bid more aggressively this week.

He says $1 to $2 higher would be a real victory. “Up until yesterday, you’re thinking that, hey, let’s try to get $3, $4, $5 better on cash just by judging where the April futures track, it is typically over $3, $4 above that. But yeah, you’re going to get a little regression today with the action of the marketplace. Packers are probably going to wait until after the on feed report,” he says.

The Cattle on Feed Report will compare to a year ago and the tightest numbers ever so the trade guess for placements is around 100%, on feed at 99% and marketings at 92%.

Packer Kills Cuts, JBS Strike
Packers had regained some leverage cutting kills and that has pushed Choice boxed beef values above $400.

The market has also absorbed the JBS plant strike in Greeley, CO as the plant has been dark the last two weeks, while cattle were diverted to Grand Island, NE and Cactus, TX plants.

Kooima says packer profits have seen a $300 to $400 swing. “The packers aren’t going to just run away with that. They’re making $100, $150 on paper. But I think they want to have maybe a few weeks of that to really get themselves in the black. And then I think they’re going to be forced to be like, all right, let’s try to make some money here. And we’re not too far away from a spring demand event, but that’s a couple of weeks down the road potentially. But those are something that’s something that we’re going to keep our ear to the ground on and just, hey, if there’s some Saturday kills starting to show up, I think that leverage swings right back to the producer.”

Hogs Consolidating
Lean hog futures were lower early Thursday with cattle and the lower equity market and have been consolidating off the highs.

Kooima says hogs are usually more recession proof and ignore the equities but there is fund long liquidation with the technical damage that was done to the charts.

“Starting last week we kind of broke a little bit of an uptrend line the cash and cutout have been relatively flat especially the cutout it goes down to $98 hits it set on $100 and back and forth we go. The cash is a little bit better this morning and is about the highest we’ve had in two weeks. The open interest every day has been declining which tells me that some of the funds are just liquidating they’re not getting short they’re just coming out of some length,” he explains.

The market is also waiting for slaughter numbers and weights to start declining with the increasing disease problems.

“Weights are a little higher than a year ago. Our kill numbers are a little bit higher as well. Not much, but we keep kind of getting preached about numbers are going to get smaller. They should be tight now with the disease aspect. So what I’m going to be looking to hear from customers in the next little while to see if these packers maybe start actually taking off a Saturday kill in the hog world that’s extremely friendly because that’s going to bolster your cutout level to a higher level,” he says.

Corn and Soybeans Higher With Crude Oil
Corn and soybeans futures are higher early Thursday adding risk premium and following higher crude oil.

He says, “I think it’s all really tied to more of the energy marketplace. You look at soy oil, look at the crude oil and what that’s doing as well. That’s keeping some bidding underneath these price levels.”

After the massive liquidation on Monday the funds have been back in buying in corn and soybeans especially as the war in Iran heats up.

“Yesterday, we kind of saw a little bit more of what’s really going on over there, as Israel is also attacking without the U.S. knowing. So I think the funds are kind of taking on that and saying, this thing is going to go on for a while. The damage has been done. Now we got oil.
Gas fields exploding. The infrastructure is going to take a long time to repair. So I think these funds are kind of in it just for a little bit more of a long haul,” he explains.

The funds are also buying grains and other markets on inflation fears as economic indicators are starting to show the evidence and impact of the higher energy markets.

“Anytime that you have a headline like that, the funds aren’t afraid to plow into some of those grains,” he says.

Why Cattle Faded the JBS Strike: Soybeans Tank on Fear Over Trump/Xi Meeting

Mon, 16 Mar 2026 15:33:01 GMT

Cattle and hogs were higher early Monday with the grain markets sharply lower led by soybeans.

Cattle Fade JBS Plant Strike
Live and feeder cattle futures opened higher on Monday morning, fading the JBS plant strike in Greeley, CO.

Brad Kooima with Kooima Kooima Varilek says there were a couple of reasons the market ignored the strike and the biggest was the higher equity markets and lower crude oil. However, it was also tied to the fact the strike news was already priced into the market.

Kooima says Greeley was already dark last week. “There seems to be some confusion about what went on last week but you know the week before Friday in the afternoon the the union voted to strike or to walk out in 7 days. When they gave management their decision the manager said don’t bother coming next week. So last week we didn’t kill cattle at Greeley because of that. Now this week we’re on strike.”

He says interestingly enough the headline following algorithms that might be selling on the plant strike saw an offset from the outside markets like the equities.

How Long Will the Strike Last?
Kooima says the key to how long the market can continue to hold up depends on how long the strike lasts.

“I don’t know how long the strike’s going to last. But, I mean, it’s not going to last forever. I don’t think this is 1979 where that place went on strike for a year, if anybody doesn’t remember that. 79 into 80, a year at Greeley. I do think that this will be sooner rather than later. “

In the meantime he says JBS has been largely out of the cash market for several weeks.

“So if they would settle and need to try to buy some cattle, I would think you’d get a lift on the front end of the cattle futures and probably improve the cash market as well. So I don’t know if that’s this week, next week, or if it takes a little longer than that. To me, it’s a matter of how many weeks do we think it’s going to last,” he explains.

Could President Trump Step In?
There has also been speculation that a strike would not last long because President Trump might order the employees to go back to work.

Kooima says, “That’s news to me. You know, President Trump is unpredictable. How’s that for a polite answer? I think he’s got plenty of other things to worry about right now than that, although we all know he thinks beef’s too high, although he has put that comment in the closet, thankfully, here the last while.”

Less Negative Impact Because of Tight Cattle Numbers?
The impact of the Greeley plant being dark and removing the ability to kill the 5,400 head a day the plant slaughter may also be muted because of the tight numbers in the current cattle cycle and excess slaughter capacity says Kooima.

“If we were running along killing 125,000 a day, for instance, I think it would have been a lot more devastating. As it is, there’s still, like you just said, there’s not enough cattle to fill what we’ve got. And so I’m not alone thinking that there’s a chance that another plant will go down before this cycle’s over with yet,” he adds.

Can Cattle Recover?
Cattle futures were higher to start Monday and the April contract had filled an important gap area. However, the market was stopped at the first layer of chart resistance. So can the futures fully recover especially with the stock market on weak footing due to the Iran war?

Kooima says there are many headwinds right now in the market including the fact the packer has regained leverage. That’s why cash was $5 lower last week at $235.

“Cash was five lower last week, and we didn’t hardly sell any cattle. Feedlots showed quite a bit of resistance to the lower bids. So now we’re going to heighten that negotiation here this week because we’ve got carryover cattle and some of these cattle are big. So we’ll see who blinks first,” he says.

The other key will be what the stock market does from here and whether futures can regain enough strength to get fund or speculative traders to re-enter the market.

Lean Hogs Bounce With Cattle
Lean hog futures were also higher early Monday with help from cattle and a more risk on tone in the equity markets.

However, Kooima admits the resiliency in the cash and cutouts have also been supportive for the market, plus the tighter numbers expected ahead due to disease.

Grains Tank on Fear of China Meeting Cancellation
After a gap lower on Sunday night the grain markets were sharply lower on Monday. Soybeans were down over 50 cents early on fear that President Trump was going to cancel his meeting with President Xi in China at the end of the month, striking down chances for additional soybean purchases.

Trump asked China over the weekend to help get the Strait of Hormuz opened to allow crude oil to be shipped and threatened if they did not agree he would cancel the summit with the two leaders.

Kooima says the soybean market is taking out premium on that fear and that is spilling over to drag down the grains. However, the lower crude oil market is also taking some of the air out of the grain market balloon.

Can Cattle Recover and is the Greeley Strike Priced In? Row Crops Follow Oil

Fri, 13 Mar 2026 15:08:06 GMT

Cattle were higher early Friday with hogs and grain markets lower.

Cattle Bounce With Equities But Can They Recover?
Cattle futures found early strength Friday in tandem with the bounce in the equity markets and the pull back in the energy markets, according Scott Varilek of Kooima Kooima Varilek.

He says the cattle were in lock step with the S&P all week and have seen a huge an ugly technical correction.

Live cattle futures took out the 100-day moving average and are still trading below that level. So, after that technical damage how much recover does he expect?

“I wish I could really confirm that it bottomed here and we can start to recover. For me, we’re still looking at some retracement levels that are below us yet. I’m still a little bit more worried about that. Generally on Fridays, it’s been head for the hills. We got a weekend coming. We don’t know what’s going to happen overseas. You know, at least that that news is a little quieter today and the outside markets are holding their own. That’s what’s helping the cattle a little bit because Fridays have been doom and gloom.”

He says looking at retracement levels on the feeder cattle chart he thinks there is more downside risk.

“It looks like feeders have another $15 room from here before they get to a halfway retracement level. So your support lines are just looking like they’re a little bit a ways underneath us yet, and I think that’s a lot with the anxiety that’s wrapped up around this market right now.”

With Greeley Dark, is the Strike Fear Priced In?
The other anxiety has come from fear of the Greeley, CO beef plant strike on March 16th. However, Varilek says the plant has been dark most of this week and JBS has been shifted cattle to other plants to be slaughtered.

“Yeah, I think there was a lot of cooler clean out that was happening on Thursday and Friday this week. So the word that we had heard is that they were not running. So, you know, and they’re going to be dark on Monday. So I think this is already in the market.”

The key now is how long the strike lasts. He says the market talk is four weeks.

“You can hear plenty of different rumors out there on how long it could be. But what you do like is that, hey, we’ve got some packers that are getting in the black a little bit here. That’s going to help maybe incentivize trying to get it reopened. I mean, we’ve got spring demand coming on us hot and heavy. We’re what, a week away from the first day of spring. I would think that that might help out. “

Packers Pressure Cash Market
In the meantime, packers regained some leverage against the producers and that led to lower cash trade this week.

According to Varilek most of it was $235 live in the South, which is $3 to $5 lower depending on the location. Northern live prices were also at $235, down $5 from last week and dressed prices were at $372, down $8.

“They’ve (packers) been able to drop this cash market and we have some willing sellers. Once the cash market started to slip, everything’s starting to feel uncertain with war happening. As I had alluded to, we have large cattle, big cattle and a lot of those cattle hit the show list here in the North. So producers were saying okay it’s time for me to clean up,” he explains.

Choice Beef Prices Near $400
With higher gas prices and economic fears there has also been talk about how that is eroding consumer beef demand. Throw on top of that the fact that Choice boxed beef is nearing $400. However, Varilek says so far he is seeing no evidence consumers are backing away.

“It’s a little early yet. It’s a little bit nerve wracking that, yes, these energy prices shot higher and fast. So the fact that it went up so fast, if we don’t see any relief here, say over a couple of weeks, two, three weeks, then it could start to show up. But immediately, no, we’re not not seeing the effects of it right away, in my opinion there.”

Hogs See Profit Taking
Lean hog futures are lower again on Friday with profit taking and fund selling as the summer month neared the contract highs earlier in the week. Varilek says the futures premium to the Lean Hog Index got too wide and so there is a correction taking place.

He says the market has rallied on talk of disease concerns but the slaughter pace will need to slow down as proof of lower supplies.

“We need to see some proof now that these numbers are tighter you know because the cash market’s not rallying as fast as uh as these funds want it to. So, couldn’t get through and make new highs, just didn’t quite have the confidence to do it. We’re finding ourselves on a pretty good correction here.”

Grains Correcting with Energy Markets, Farmer Selling
Grain markets are lower in tandem with the correction in the energy markets early Friday. Varilek says with the big run up this week it is understandable to see some profit taking heading into the weekend.

However, there has also been some farmer selling that has picked up.

“It was a nice opportunity for farmers and what that did is you saw Dec corn get right near $5 and a lot of farmers saying wow i can’t believe i got that high I should be looking at some selling opportunities here. Hearing lots of questions about what do I do with all of my old crop, starting to move some of that. So a little bit of pressure from farmer selling,” he explains.

However, if the Iran conflict flares over the weekend and crude oil shoots back up, the grains will likely follow he says.

Cattle Plunge on Economic Fears, JBS Plant Dark: How Low Do Prices Fall?

Mon, 09 Mar 2026 15:13:40 GMT

Cattle are sharply lower Monday with hogs following. Grains are higher.

Cattle Tank on Economic Uncertainty
Cattle futures are sharply lower on Monday with feeder cattle touching limit down at one point on economic uncertainty according to Brad Kooima of Kooima Kooima Varilek. He says futures gapped lower on the open and traded sharply lower with live cattle gapping below key support at the 50 and 100 day moving averages. “Uncertainty is bearish cattle. That’s just what it is, folks.”

He explains the risk off selling in the stock market, specifically the S&P, and higher crude oil futures are heavily weighing on the market. “You’re looking at energy costs. The fear here would be that, you know, if you’ve got a budget, so much is going to go to put gas in your car to go to work or cost to heat your home, all the rest. You know, is that going to translate into creating some recessionary worry or you know disposable income changing,” he says.

Funds Liquidating
He says this isn’t a fundamental or a supply problem but fund managers are liquidating due to the fear in the market and the volatility. “You’re going to go like gee whiz i think maybe I’ll find some calmer water to swim in instead of trying to figure out you know day to day what’s going on here especially when so much of it is impacted by a 24/7 situation like we have here in the Middle East right now.”

JBS Plant Dark This Week
Also adding pressure to cattle futures is the news that the JBS beef plant in Greeley, CO, will be dark this week. Kooima says, “I would say that they’ve reached a significant impasse in negotiations. The way the deal was set up, the way the agreement had been, we all know that the union had voted a couple of weeks ago already to strike but they were willing to keep working while they negotiated.”

However, the vote on Friday was to strike in seven days he adds, “They are required to give a seven day notice if they were going to walk out so that was the vote that happened on Friday afternoon they voted to walk out so they gave the management seven days notice manager said you know what don’t bother even coming in for those seven days so they closed at Greeley.”

He says their other major plants are going to kill Saturday, so that’ll make up a part of it, not all. Negotiations will resume and hopefully they will reach a resolution. However, he thinks with packers losing money it may give the packer leverage.

“I mean, it doesn’t take too much of an imagination to think that if you’re going to have a work stoppage, maybe now wouldn’t be such a bad time if you’re management. On the other side, though, you’ve got worries about, you know, can you retain your employees? You’ve got to be a reliable supplier of beef to your customers.” So he says it’s complicated.

Lower Cash Cattle
Cash trade also developed at lower money on Friday with mostly $240 paid in the South and North, so down $2 to $4 from last week. Some dressed trade at $$380 was also reported, down $3.

“I was kind of relieved that we could get $240. Bought a lot of cattle around here at “240. I’m kind of intimated with you here on that. I worry a little bit that we’re not killing the available supply. I know supply is tight, but is it this tight? These kind of slaughters that we’ve had the last two weeks, especially, my goodness. I mean, you would say that it was Christmas. I mean, that’s how light that kill has been. And if you look at the average weights, they’re big. We did sell some cattle at $240, which is lower, but at least we got some cattle sold.”

Futures Take Out Support
The live cattle futures took out major chart support on Monday so how much technical damage is done? Kooima says, “We gapped through the 50, the 100 day moving averages. Halfway back on April cattle is in that $225 range. And that’s another $3.50 lower than where the market’s sitting right now. I think we go at least there.”

He says he hopes the big futures discount to cash will eventually hold the market.

Hogs Fall With Cattle, But More Resilient
The hog markets fell with cattle futures Monday morning but have been more resilient than cattle because of the growing disease issues in the country.

“There’s another round of disease, you know, affecting isowean prices, feeder pig prices, you know, for what the prospects will look like for the kind of supply we all have for fed hogs in the summer when demand typically is quite good. So, you know, I think that that’s part of the reason why we’re here already,” he says.

However, the other supportive factor is pork is a cheaper protein than beef.

Grains Make New Highs for the Move
Grains markets were all higher Monday, although off of overnight trade. The markets have been hitting new highs for the move adding in inflationary fears says Kooima.

“A lot of it is higher crude oil. Plus, are we going to be able to get normal export activity out of that Middle East area or not with the Strait closed? Will the cost of fertilizer impact our new crop corn plantings? December corn is stronger than the old crop today. I’m sure that that’s part of the reason.”

However, he cautions that when crude oil starts to move the grain market could quickly retreat so he is suggesting putting in price floors with options.

How Far Will Corn Acreage Drop?
With concerns about getting the last 10% to 15% of fertilizer in place and with soaring prices there may be a switch out of some corn acres. How much?

Kooima says in Iowa many farmers can use manure so planting intensions won’t budge. But nationally, he is projecting 93 million acres of corn verses the 98.8 million planted last year.

“There’s some areas that will be 20% loss on some of the fringe parts of the corn belt, especially when you get a little bit south and then get into the southeast. Sorghum’s had a big rally. When you get in these areas that are subject to this rust and all this other disease stuff further south, they’ve really got hit with that. They’re probably looking for a reason anyway to get out of it, whether it’s fertilizer or not.”

Can Cattle Stay Resilient With the S&P Correcting: Grains Rally With Crude Oil

Fri, 06 Mar 2026 16:07:47 GMT

Cattle were lower early Friday, with hogs and grains higher.

Can Cattle Remain Resilient?
Cattle futures were lower on Friday morning in tandem with the lower stock market. Scott Varilek with Kooima Kooima Varilek says the uncertainty of the war in Iran has caused some reallocation of money this week. It has been coming out of markets like the metals, plus the DOW and S&P and going into especially crude oil which has seen a $20 rally this week.

Varilek says the correction in the stock market has broke the cattle futures several times but the market continues to claw its way back and close above key support on the charts. Can that continue? Varilek says, “So cattle market has been resilient. That is absolutely the word to use this last week because I think there was plenty of stories and uncertainty folding around in that market. However, there was somebody really protecting that market and there was plenty of rumors around who is doing this who is there a packer that short bought cattle? You know we don’t get to know that but it kept fighting its way back and now today getting this break. And I think this is finally, hey, we’re looking at a stock market that’s continuing to correct. The war is the front of the storylines all day here. And it just doesn’t look like that’s going to end real quick. I think that there’s just more that’s got to happen yet. It’s not going to be the we’re in and out. We got this job done. Good job, boys. Bring them home. Now it’s extending just more uncertainty and scared.”

Higher Gas Prices Hurt Beef Demand?
With crude oil up $20 in a week that is being seen at the gas pump by consumers. So is there fear about demand backing off for beef? He says, “Demand was such a slam dunk. Hey we’re gonna have such a great spring no problem everybody’s gonna grill, stock markets at record highs and now this just throws that little wrinkle in there. With energy prices surging you know you you can hear a few stories here and there well people are starting to line up the gas pump a little bit making sure they’re filled up and we get into bunker mode when some of this happens.” So it’s putting a question market around demand.

Plant Strike Uncertainty
At the same time is there still concern about whether or not the JSB plant in Greeley, CO, is going to strike? Varilek says they are supposed to vote today but the outcome is unclear. “I think everybody wishes we knew more about what’s happening with the Greeley plant. But yeah, the news, you get rumors that circulate around in this market and it’s fought it off. Great. But latest is that they’re meeting today, this afternoon, possibly.” He says it would be positive for the market if it gets resolved and would hopefully help bolster chain speed and cash trade.

“We might get some cash boost in the market as they might need to buy some cattle again. I mean that was kind of the rumor why the market was running a little bit because hey there’s some people that need some cattle. So, i think that would help us out and we would love to just get that story behind us because there’s so many other you know things that we got to focus on right now,” he says.

Who Has Leverage?
In the meantime, the packers have been throwing out low cash bids at $235 he says, to try to break the psychology of the market. So who wins out or blinks first?

Varilek says, “You know, this cash market isn’t, you know, feeling as good as it was. So we’ve got producers that are making cattle big. It’s paying us to do it as the feeders are high the feed has been cheap so I will just make them bigger. I think we’re finally getting to the point we saw some very light kills here as of recent and now the packer’s getting a little bit more leverage. We got the low ball $235 bids and then there was a few you know yards that were trying to get $240 yesterday could not
get it so we’ll kind of see who blinks first.”

However, he thinks the packers may have the leverage until the weights get cleaned up. “And that’s what needs to happen. So not feeling as great about our cash market here going into this week. And you hope some of it happens. Some of these guys get it cleaned up because if we don’t. get a big cash trade then there’s going to be more big ones next week on the show lists,” he adds.

Chart Support Needs to Hold
So far this week the 100-day moving average has held on the charts and so today the close will be critical. “This last break that we had, you know, last week, we’ve got some lows down there that are going to be pretty key support. You know, it could be a pretty important line below those 100-day moving averages. So you’re looking at, you know, $228.50 on the April,” according to Varilek.

Hogs See More Profit Taking?
Lean hog futures were lower on Thursday on profit taking but he says there is not much new to push the hogs lower. “I’m just a broken record. I think the disease stories are still out there. You get some horrifying news out of a place and it circulates around the market. So we hear about it. And I think that’s still the main thing, the tighter supply. I think the funds can still hold pretty good. If we start seeing some broken up trend lines, then it could happen to get a little bit worse, but I don’t see that happening for a while yet. I’m still feeling confident in some upside on the hogs.”

Grains Rally With Crude Oil
Grains are also up Friday morning with new highs for the move in both corn and soybeans. The buying by funds is an inflation play as crude oil makes new highs. “Yes, that is what is pushing these markets up. And it’s going to be a nice shot in the arm here. We’ve already got farmers starting to look at this and say, hey, I didn’t know this opportunity was coming. I thought maybe it would be weather or something but this is maybe something that the grains needed just to give us some opportunities to to do something,” he explains.

However, he doesn’t want to pull the trigger to quickly but says farmers need to start pricing some grain to help their balance sheets. “We’ll be watching the energy markets and the outside markets close.”

How High Could Grains Go?
However, if crude oil keeps rising to $100, how high could grains go as a follower? He says corn may have a shot at getting above $5 and the market is already above $12 on beans but says it is anyone’s guess.

But with money coming out of the equities it is finding a home in the grain markets. “It is good to have them on your side at least when they’re when they’re on the pushing it the way you want it and those charts are starting to look like somewhere if a fund was looking at it at some generally low historical prices say and we’ve got an uptrend happening that could be an easy place for them to try to go,” he adds.

Crude Awakening: Rising Oil Prices Complicate Fed's Rate-Hike Decisions

Wed, 20 Sep 2023 21:16:16 GMT

As brent crude futures soar toward $100, it’s creating a new battle in the Federal Reserve’s effort to fight inflation. One money manager warns another rate hike is likely.

Brent crude futures, the international energy benchmark, are on track to rise by 26% this quarter having climbed to about $95 a barrel. On Tuesday, they added 0.4%, putting prices on track for a four-day streak of gains and rises in 13 of the past 16 trading days. West Texas Intermediate futures, the U.S. benchmark, have jumped 29% this quarter to just over $91 a barrel.

Gasoline prices are already on the rise to a national average of $3.88 a gallon in the U.S. from $3.68 one year ago, AAA said. Gas costs jumped 11% from July to August, driving more than half of overall inflation for the month.

Meanwhile, the price of diesel, which often fuels trucks and factories, has soared even faster, especially in Europe. In the U.S., the average price is $4.58. Data from Britain this morning showed inflation fell faster than expected last month, but rising fuel prices were an outlier to that trend.

U.S. oil stockpiles fell by 5.25 million barrels last week, the API is said to have reported. That would bring holdings to the lowest in more than nine months if confirmed by the EIA today. Meanwhile, Goldman Sachs today raised its price target for Brent crude to $100, joining a growing club that predicts triple-digit oil heading into the winter.

As energy costs are on the rise, Pimco money manager Geraldine Sundstrom, says markets are underestimating the risk of another rate hike before year-end. “Higher for longer” is likely the mantra for US rates as “inflation will remain a little bit stickier than expected,” Sundstrom said.

Another important note for agriculture is the U.S. dollar is staging a comeback, surging in value despite earlier predictions of a decline, while economic growth in China and Europe faces challenges. This reversal in the dollar’s fortunes began in July, defying expectations of a retreat that were based on the belief that the Federal Reserve’s interest rate hikes were approaching their conclusion.

The dollar’s resurgence is now reminiscent of its strong performance in 2022, a year marked by economic disruptions as it drove up commodity prices in global markets and increased the burden of foreign debts for many. Mark Nash of Jupiter Asset Management characterized the dollar’s current strength as formidable, noting that he had abandoned his pessimistic stance on the dollar earlier in the year.

Freight Costs To Remain High Through Winter, Analyst Says

Fri, 28 Oct 2022 20:58:48 GMT

Freight costs are likely to remain elevated through the winter, despite the recent decline in crude oil prices, says Altin Kalo, senior economist at Steiner Consulting Group.

The U.S. Energy Administration’s recent update put inventories of diesel and heating oil at just 106 million barrels, well below the five-year range and also at the low end of the range for the last 40 years.

“Tight inventories continue to underpin diesel and heating oil prices,” Kalo said. “The average heating oil price for the week was pegged at $5.704/gallon, up 68% compared to a year ago.”

The severity of the winter weather this year will determine the trajectory of fuel oil prices. While diesel prices seemed to ease a bit towards the end of the summer, Kalo noted they have started to climb again. For the most current week the average price of diesel fuel in the US was $5.341 per gallon, up 9.2% in the last four weeks and 44% higher than last year. For diesel, the Gulf coast was the low point at $4.987 per gallon, while California was the high price at $6.331 per gallon.

“There is a wide range of diesel prices around the country, reflecting regional supply availability and tax structure,” Kalo said. “Normally the price of diesel will track with crude oil prices since it is the biggest contributor to its production cost. Last year crude oil accounted for about 49% of the overall cost of diesel fuel. Distribution and marketing was 20.2%, federal and state taxes made up 17.4% and refining costs accounted for 13.5%.”

But the spread of diesel vs. crude has widened significantly this year as the market has been unable to bolster supply quickly enough to match up with demand.

“Inventory depletion means that higher prices are needed in order to limit the quantity demand even though crude prices may be down,” Kalo said.

In its October outlook EIA noted that diesel prices for 2022 will be up about $1.7 per gallon vs. the previous year and only $0.7 of the increase is due to higher crude oil prices. The rest has gone to a larger wholesale and retail margin.

“Diesel fuel affects the entire food supply chain, from the tractors and pickup trucks on the farm to the trucks that deliver grains and livestock to plants and the vehicles that move meat products and finished goods to processing plants and retail stores,” Kalo said. “Diesel fuel is a key component for freight costs but it is not the only one. Labor, equipment and overhead are an important consideration, too. According to an index of freight trucking from the US Bureau of Labor Statistics, freight costs have been rising at a slower rate. But keep in mind that they are still rising. In September the freight PPI was up 20% compared to the previous year. Earlier in the year costs were up as much as 37.5% y/y. But cost is still up and it is now 49% compared to January 1, 2020 before the start of the pandemic.”

Higher labor and other costs are already baked in, Kalo noted, and those costs will continue to flow through into the various products traded and ultimately paid for by the US consumer.