Harold House with the Kansas City Trade Group has a review of Friday’s Supply/Demand and Production report released by USDA.
To hear Kansas City Trade Group’s Harold House talk with KMZU’s Mandy Young click below:
Look for the cattle complex to open moderately higher thanks to cash market premiums and early week-short covering. Lean hog futures should also begin with a firm undertone, supported by further season strength in fundamentals.
Cattle: Steady Futures: 10-30 Higher Live Equiv. $139.96 – 0.18
Although the cash cattle trade should typically start in low gear this morning as buyers and sellers focus on the early-week chore of showlist distribution, last week’s slow pace of business could mean that significant trade volume develops earlier than normal, perhaps as soon as Tuesday or Wednesday. The midmonth offering should be steady to somewhat larger. Early asking prices are likely to be around $128 in the South and $205-plus dressed. Live and feeder futures are expected to open moderately higher, supported by follow-through buying and the pull of substantial cash premiums.
Hogs: Cash Steady-$0.50 Higher Futures: 10-30 Higher Lean $96.92 + 0.61
Hog buyers seem ready to resume work this morning with stead/firm bids. Spot May is scheduled to expire on Tuesday. Interestingly, June seems a bit reluctant to take the lead position even though cash has been on a major roll since late April. Lean futures are expected to open moderately high thanks to the improving potential supply and demand fundamentals.
Corn futures are higher, soybeans, higher and wheat higher. Grains started the overnight session lower, but stabilized in low volume trade.
The Japanese yen continues to weaken following the latest round of economic easing out of Tokyo. This sparked renewed buying in the Nikkei that spilled over into other Asian stocks, with additional buying tied to more bullish economic signals out of China. All of this led to continued support in the U.S. dollar index and renewed pressure in outside commodities including gold and crude oil.