Cash cattle trade started to pick up yesterday, the bulk of it coming in near 113 in KS & TX. The market managed to rally on the back of this news as market participants seemed relieved that it wasn’t lower.
Live cattle futures were nearly limit down on Friday and nearly limit up on Monday, as mentioned in yesterday’s report and in our interview with RFD-TV, the outside markets will be the driver of price action in the near term.
May soybean futures saw a choppy and volatile trade in the back half of last week as market participants try to grapple with the effects of coronavirus. Friday’s Commitment of Traders report showed funds bought 14,634 contracts, trimming their net short position to 75,130.
The S&P has now lost more than 500 points and 15% from its fresh record last Thursday. Yesterday’s failure to hold 3050 into the close was a sure sign of more pain to come, something we voiced here in our Technical section.
April live cattle tried to stage a relief rally early yesterday morning but failed miserably to hold a flame. Futures continued lower into the close, making new lows for the move and coming within arm’s length of the contract lows from September.
April lean hogs fell victim to the spillover effect from the outside market turmoil but managed to hold their own better than we had anticipated. If outside markets can find their footing and stabilize at the least, we think there is an opportunity in the near term.
The U.S. Dollar continues to be trading near multi-month highs which is throwing a wet blanket on grain markets. The risk-off trade created by the spread of coronavirus has and will continue to affect near term money flow in commodities, including corn.