Cattle and hog futures started lower on Friday morning. Grains markets saw pressure in corn and wheat with a little bounce in soybeans.
Cattle Start Weak Awaiting Cash Direction
Live and feeder cattle futures were lower early Friday as the markets have hit some chart resistance and are overbought according to Scott Varilek of Kooima Kooima Varilek. However, it didn’t take long for the markets to firm up supported by the cash market.
Fed Cash Trade Light But Strong
Fed cash cattle trade has been light this week but there was some Northern trade on Thursday paid by at major packer at $228 on a string of around 1,400 head that he was spooked the market. However, it was an outlier as bids started surfacing at $232 offered by three majors that were mostly passed on by feedlots. On the mandatory report USDA also had Northern dressed trade at $360 to mostly $365, which is up $5 from last week’s weighted averages. So, Varilek is anticipating higher fed cash to break Friday and the futures market is as well.
Cash Feeders on Fire
Varilek says the real leadership has been in the feeder cattle market as cash at auction barns has been on fire and the index has tacked on about $19 for the week. So, feeders have been the leaders on tight supplies.
More NWS Cases
However, there was another New World Screwworm (NWS) case that was report in Mexico on an older cow on Friday and there have been additional cases reported on calves. Varilek says there was a lot of talk in the market that the border was going to open to imports of Mexican feeder cattle by the first of the year. However, the additional cases continue to keep the market optimistic and just adds to the already tight supply situation.
Tyson Plant Closure in Lexington, Neb.
Tyson’s beef plant in Lexington, Neb. was initially scheduled to close operations on Jan. 20 but Varilek says their sources say there are no shifts scheduled for next week. He says the closure of the plant will have a negative impact on the amount of negotiated cattle traded in Nebraska. “That was a formula cattle plant and so now those cattle will get divided up and sold at Dakota City and North Platte which will mean fewer homes for negotiated cattle and that isn’t good for the market.”
2025 Cattle Slaughter Tells the Story
USDA’s slaughter figures for 2025 did show total inventory was down over 6% from the previous year. However, Varilek says the other story that was hidden in that data is that beef cow slaughter was down 17% from a year ago. This is lower than in recent previous years and indicates to him that there is some female retention starting to take place.
Lean Hogs Fall with Cash
Lean hog futures were down early on Friday on profit taking after running into chart resistance and getting oversold after Feb. hit 2.5 month highs. However, Varilek says the cash trade is also getting sloppy. The national negotiated cash market was down $3.24 on yesterday’s close and the lean hog index was down $.27 coming into the session at $80.98. However, he says the summer months are still well above $100 which is an indication of the disease reduced inventory expected in that time frame.
Grains Position Ahead of Reports
Corn and wheat were lower early Friday with the stronger dollar, while soybeans saw a bounce on a flash sale of 7.3 million bu. to unknown destinations. However, Varilek says the markets are more dominated by positioning ahead of the big USDA reports on Monday.
