Cattle opened lower and quickly found footing. Grain futures opened lower Friday morning with hogs seeing early strength.
Cattle Futures Pause After Chasing Sharply Higher Cash
Live and feeder cattle futures took a slight break Friday morning after soaring to new highs for the move on Thursday. Scott Varilek of Kooima Kooima Varilek says it was sponsored by sharply higher fed cash trade. “Cash was king this week,” he exclaims.
Cash trade started to break on Wednesday night in the North at higher money. Dressed prices ranged from $330 to $335 but mostly $352 to $354, up $9 to $11 from the previous week’s weighted averages in Nebraska. Thursday Northern dressed deals were mostly $353 to $355, $10 to $12 higher than the prior week’s weighted averages. The volume of live sale prices were at $230. The South also traded mostly $230, up $6 from the previous week. The range was from $225 to $234. Varilek is optimistic about higher cash next week as he says feedlots will be raising asking prices.
Cattle Futures Break Above 50% Retracement
Both live and feeder cattle futures on Thursday broke above key 50% retracement levels but ran into resistance on Friday morning. “The market is overbought,” says Varilek, so he wasn’t surprised to see the early correction. Plus, the futures left a gap area on the charts on the opening Thursday morning and may want to fill that gap before taking the next leg higher. “If we don’t fill that gap and instead go higher to try to fill the chart gaps above the market that would be bullish,” he says.
Can Futures Retest the Record Highs?
Varilek says it may not happen yet by the end of 2025 but there is a possibility the futures market could retest the all time highs set in October of this year. To do that cash will need to continue strong and boxed beef will also need to rally. “But there is a chance,” he says.
Boxed Beef Weakens
The one concern is boxed beef values have slipped with the Choice cutout dropping below $360 on Thursday. That combined with the higher cash prices packers paid for cattle likely has packer margins slipping back slightly in the red.
Lean Hogs See Fund Buying
Lean hog futures have confirmed a bottom and started a short term uptrend on the charts. Cash trade and the lean hog index have started to move higher in typical seasonal fashion with the index up 41 cents at $82.57. The cutouts have also been working higher up another $1.57 on Thursday at $98.84. Disease is also starting to break in major production areas with reports of PRRS in some barns. All of these factors and the chart pattern have funds back in buying hogs according to Varilek.
Soybeans Crash Through Support, Corn Follows
Soybeans were sharply lower on Friday breaking the $10,80 support area on the charts and corn and wheat followed. That’s despite more flash sales of corn and soybeans. Private exporters reported 4.85 mb (132,000 MT) of soybeans sold to China and 9.8 mb (250,000 MT) of corn sold to unknown destinations. Both 2025/2026. Plus, 104,328 MT of soybean meal to Mexico. 93,895 MT for 2025/2026 and 10,433 MT for 2026/2027.
Varilek says technical selling is part of the story in the soybean market as traders and chart watchers are eyeing the gap area on the charts from Oct. 24 down around $10.63. Plus, dry areas of Brazil have been picking up some rain the last week and there is more in the forecast and that may be weighing on the soybean and corn markets as well.
