Written by Chris Winward

4-28-25

Cattle

Last week's cash finished up $3-4 with 212-213 in the south and 215-217 in the north.  With April going off the board and June at a $6 discount- the path of least resistance is higher.  Spec longs have been adding to positions per the last COT report and have no reason to relinquish that length at the moment.  AM boxes this morning were strong with choice up 5.14 @ 341.62 and select up 3.74 @ 323.85.  The last few trading sessions have rewarded longs with resistance levels being taken out and new contract highs being made.  

Futures responded positively to the new world screw worm headline that came in over the weekend where the US Secretary of Agriculture Brooke Rollins sent a letter to the Mexican Government stating that our borders would close again to Mexican cattle, horses and bison if steps were not taken to stop the spread into the US.  The deadline stated was April 30th.  One of the steps in prevention is releasing sterilized flies- a process which has been successful in eradication in the past.  Mexico is running flights 6 days per week and Secretary Rollins asked that to be done 7 days per week instead.  I believe the Mexican Government will make these changes in the coming days.  I found it a little interesting that the $2 higher feeder futures opening did not hold throughout the session.  Stocastics are overbought and unless the cash market is significantly again higher this week, I think this move in futures could retrace and fill some gaps.   I am hearing rumblings of as high as 220-225 asking prices this week.    Choice boxes trending higher will be supportive.  The outside markets are holding together rather well and rate cuts later this year would be beneficial to cattle as well as equities.  The tariff situation seems to be unwinding which will lend support to both markets if more progress is made.  

Grains 

This week's crop progress report was just released and showed the US crop at 24% planted, one point below the guess but 2% above the 5-year average.  The crop is 5% emerged vs 4% avg.  Soybeans came in at 18% planted vs 12% average.  Recent rains have caused some planting delays in Southern Illinois, but an earlier start with bean planting is helping offset this.  US weekly inspections were within the higher end of expectations for corn but within expectations for beans.   Wheat was the only of the three that was higher than the range of guesses.  The US dollar continues its recent selloff which will help exports for the entire grain and oilseed complex.  Chicago wheat made new contract lows today.  

Energy

Crude oil posted another down day with the June contract hovering near the $62 level which is offering support for the time being.  Natural gas had a big up day with the June leading the way higher closing up almost 7%.  It's called the widow maker for good reason and can do that even after last week's bearish storage report.  I see demand for gasoline remaining strong, even as consumers pull back on discretionary spending in the coming months.  

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