Cattle and Grains See Risk Off Selling on Iran Conflict: Have Cattle Topped?

Cattle and grains futures are mostly lower early, with hogs rebounding after a lower opening.

Cattle See Early Pressure on Risk Off Selling Tied to Iran Conflict

Cattle futures were lower on the opening in reaction to the risk off selling in the financial markets and the higher dollar, which is tied to the U.S. and Israel attacking Iran over the weekend. That has also sent energy prices higher.

Brad Kooima of Kooima Kooima Varilek says the cattle futures are reacting negatively to that uncertainty and had already started selling on Friday in fear of the increased tensions.

“The easiest dynamic is to look at what’s going on with the stock market whether you like it or not cattle futures have a tendency to to to follow some of those macro financials. Now the stock market is a lot better it’s still lower but it’s way better than it was and i think that might be contributing to a little bit of this comeback that we’re seeing on the cattle here early morning but yes the the whole issue of uncertainty. I think that the war issue or the whole conflict here with Iran, do I think that that is a game changer on the cattle? I don’t think that will be by itself because hopefully it doesn’t last very long”

He says eventually the conflict should be bullish cattle. “So, hopefully by the time we get here the next week and we’re talking again, that this is a little bit calmed down and we’re not worried so much about that anymore.”

Cattle Futures See Technical Damage

Cattle futures posted lower weekly and monthly closes on Friday and did some technical damage to the charts. Monday the market took out the 100 day moving average on the April live cattle and so that is an area of support Kooima is watching that needs to hold. “We’ve got a softer technical picture than we’ve had here since, well, around Thanksgiving.”