EHedger Livestock Commentary 4/23/09

Published on: 16:49PM Apr 23, 2009
 
(866) 433-4371         [email protected]
 
 
Live Cattle
Feeder Cattle
Lean Hogs
LCJ9
87.75
+0.175
FCJ9
99.55
-0.025
LHK9
69.55
-1.10
LCM9
83.475
+0.325
FCK9
99.20
-0.20
LHM9
71.875
-0.50
LCQ9
83.675
+0.35
FCQ9
100.675
-0.40
LHN9
73.125
-0.35
 
Index
100.06
+0.03
Index
60.25
+0.70
 
 
Live Cattle: 
 
  • Panhandle trades $88 live; NE trades 143-144 dresssed
  • KS trades $88 live and 138.50 dressed; Co trades $88 live
 
Live cattle closed higher on the day yet well below the day’s high. The higher financial markets as well as the live cash trade at $88 kept futures firm. Cash traded at 88.00 in Texas, Kansas and Colorado. Asking prices are now around 90.00 for live in the country yet no trade is expected until the bids are raised. Midday wholesale beef was lower with choice at 153.94 down 0.43 and select at 151.20 down 0.30. June cattle futures are trading between two gaps left on the chart. Support is found near the 81.90-82.30 gap, while resistance is the 84.30-84.50 unfilled gap. As long as boxed beef can hold these higher prices, futures and cash should trend higher.
 
 
 
Boxed Beef Cutout Values
Choice
Select
Loads
153.42
-0.95
151.07
-0.43
247
Choice/Select spread settled at +2.35
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
124,000
124,000
127,000
501,000
510,000
               
 
Feeder Cattle: 
 
The feeder market closed lower on the day. Feeder traded both sides of unchanged but sold off as live cattle fell from their highs. The CME index settled at 100.06. The index being back over 100 is certainly encouraging. The next resistance for May feeders will be at 100.55 (April’s high) and 102.
 
Give us a call about our hedges in feeder cattle. Beef prices have continued to firm, cash feeders are trading higher with good demand, and financial markets remain firm. 
 
 
Lean Hogs: 
 
Direct hog markets were mixed with the IA/So.MN direct market at $62.58 up 1.05; Western cornbelt $62.69 up .91; Eastern cornbelt $59.76 down .02; and the National average at $61.78 up .72. 
 
Pork Carcass Cutout Values
 
 
Loads
59.78
+0.94
74.3
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
425,000
426,000
423,000
1.699
1.702
 
  • Pork cutout; loins +3.33, hams +.06
  • IA/MN hog weights 269 lbs vs. 269.9 wk ago and 265.6 yr ago
 
Lean hogs closed lower on the day with weakness encouraged by the weaker cutout as well as technical selling. If cash prices show any signs of weakness it could mean trouble for lean hog futures. The cutout has is once again priced below the CME index. This reflects negative packer margins and one has to wonder how much higher they will pay for hogs. The cold storage report was friendly towards hogs as frozen pork supplies were down 5% from the previous month and down 10% from last year. Stocks of pork bellies were down 3% from last month and down 26% from last year. While this report is encouraging by showing drawn down supplies buyers have been reluctant to re-stock freezers until demand fears fade away. IA/MN weights will be a figure to watch over the next month. Tomorrow hogs look to open steady.
 
 
 
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You can also contact us at 866-433-4371, or by sending us an email to [email protected]
 
 
Regards,
EHedger LLC
141 West Jackson Blvd.
Suite 1520A
Chicago, IL 60604
1-866-433-4371 Office
 
Trading commodity futures involves substantial risk of loss and may not be suitable for all investors. The recommendations express opinions of the author. The information they contain is obtained from sources believed reliable, but is in no way guaranteed. The author may have positions in the markets mentioned including at times positions contrary to the advice quoted herein. Opinions, market data, and recommendations are subject to change at any time.