Cattle, corn, and soybean futures rose while hog prices fell, according to a May 1 report. Scott Varilek of Kooima Kooima Varilek said that tight cattle supplies and record cash markets have driven feeder and live cattle futures to new highs.
Varilek said the industry is speculating about how high feeder prices could go, with some suggesting numbers as high as $400. “We’ve already seen eight weights spring $400 in sale barns in the North. So it’s not something out of the ordinary that can’t happen. So once we bust through, it feels like, yeah, they have the legs to do it.” He also warned this might be the last major upward move for a while: “I think this is our last charge higher…the chance to get to $4 is there. It really could happen,” he added.
Live cattle had already set records earlier in the week before surging again Friday morning amid strong cash trade and end-of-month activity. Cash trades reached $258 in the North and up to $256 in the South—levels not seen since 2014—surprising many market participants. Packers were reportedly buying aggressively ahead of planned production cuts due to ongoing supply shortages: “In this cattle industry, we’re…8% down…on steer to heifer slaughter this year,” Varilek said.
Meanwhile, lean hog futures dropped following confirmation of Iowa’s first pseudorabies case since 2004 involving boars shipped from Texas. While Varilek described protocols for managing outbreaks as effective—”we have vaccination capabilities already”—he noted that uncertainty remains: “So uncertainty is always bearish…a lot to digest here real fast.”
Corn and soybeans also climbed higher early Friday; November soybeans hit contract highs following gains in bean oil markets linked partly to energy price increases and global events such as war affecting crude oil prices. For corn, strong ethanol margins are supporting prices near key resistance levels: “So I feel like we’re going to be able to get through it and might get some follow through,” Varilek said.
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