EHedger Livestock Commentary 5/05/09

Published on: 17:58PM May 05, 2009
 
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Live Cattle
Feeder Cattle
Lean Hogs
LCM9
82.125
+0.25
FCK9
97.425
+0.025
LHK9
55.80
-0.175
LCQ9
82.225
+0.125
FCQ9
98.775
+0.10
LHM9
64.80
+1.025
LCV9
86.65
+0.10
FCU9
99.00
+0.05
LHN9
67.775
+1.125
 
Index
99.13
-0.17
Index
59.21
-1.19
 
 
Live Cattle: 
 
Live cattle closed slightly higher on the day on moderate volume. June cattle closed back above $82 keeping the near term trend mixed. News this week remains uneventful. Boxed beef has continued a lower trend; showlists are mostly larger than a year ago, yet futures remain at a discount to last week’s cash. Historically, basis levels are near even money as this time of the year. No activity to post so far this week as weekly volume has been formula cattle. Asking prices are mainly at $88. Midday wholesale beef prices were mixed with choice at 148.02 down 0.23 and select at 145.37 up 0.22. Load movement was more active than what we generally have been witnessing during the day. 
 
 
Boxed Beef Cutout Values
Choice
Select
Loads
146.43
-1.82
144.18
-0.97
337
Choice/Select spread settled at +2.24
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
127,000
128,000
130,000
254,000
255,000
               
 
Feeder Cattle: 
 
The feeder market closed slightly higher on the day on light volume. There is little to no news at this point in the week for feeder cattle. If hogs can show signs of recovery then the future of cattle prices looks brighter, yet we remain skeptical of strength in hogs. Cash feeders this week have started mixed. Oklahoma City feeder auctions showed cattle steady to $2 lower and Joplin feeder auction showed lightweight steers and heifers steady to slightly higher, while heavy weights were steady to lower. 
 
 
Lean Hogs: 
 
Direct hog markets were lower with the IA/So.MN direct market at $50.88 down 1.05; Western cornbelt $51.09 down .96; Eastern cornbelt $50.25 down 1.57; and the National average at $50.84 down 1.10 
 
Pork Carcass Cutout Values
 
 
Loads
56.01
+1.34
238.8
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
401,000
415,000
412,000
803,000
817,000
 
  • Cut out: Lions +2.82, Hams +1.14
 
Lean hogs closed higher on the day following short covering off of the overnight Globex trade. Open interest has declined the past two days as short positions continue to liquidate. The H1N1 (formerly Swine Flu) seems to have peaked in Mexico and as we move forward export markets should reopen. However, this process will probably not bring aggressive buying by other countries, so exports will continue to be disappointing for the foreseeable futures. Even if everyone can put the influenza behind them hogs will continue to struggle for the time being as cash and pork fundamentals remain weak. However, the oversold characteristics and consecutive days of contract lows have some traders convinced that we have reached a technical bottom. Pork cutout was higher on the day closing at 56.01 up 1.34 and also showing one of the largest non-mandatory reported load count we have seen in a long time at 238.8.  
 
 
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Regards,
EHedger LLC
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Suite 1520A
Chicago, IL 60604
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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.