EHedger Livestock Commentary 9/25/09

Published on: 17:04PM Sep 25, 2009
 
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Live Cattle
Feeder Cattle
Lean Hogs
LCV9
86.05
-0.05
FCU9
96.60
-0.525
LHV9
49.95
-0.275
LCZ9
85.35
+0.075
FCV9
96.725
-0.55
LHZ9
49.025
-0.325
LCG0
85.75
-0.15
FCX9
97.80
-0.20
LHG0
55.575
-0.525
 
Index
96.87
-0.12
Index
52.43
-0.14
 
 
Live Cattle: 
 
            NE trades $83.50 live; CO trades $84 live
            Sat slaughter 22,000 with 649,000 wtd and 660,000 yr ago
 
Live cattle closed mixed on the day. The lower cash trade pressured futures, yet sales today were slightly better than yesterday. Futures closed higher for the week. As mentioned yesterday, we believe this higher weekly close to be a positive sign looking ahead. While the gains are small it is a bit more impressive when looking at the week’s lower cash trade and lower boxed beef prices. Midday boxed beef was lower with Choice at 139.09 down 1.25 and Select at 132.59 down 0.99. Cattle prices had fallen into our support areas. We do not expect futures to start a straight path higher from here, but will continue to find support at the bottom. For now, prices (Oct and Dec) will stay within its range 85-89.
 
 
Boxed Beef Cutout Values
Choice
Select
Loads
138.55
-1.79
132.50
-1.08
230
Choice/Select spread settled at +6.04
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
124,000
124,000
120,000
627,000
629,000

 
Feeder Cattle: 
 
Feeders closed lower on the day. Bulls were unable to close feeders higher for the week as live cattle traded mixed. As stated the feeder market will be looking towards direction from live cattle. Meanwhile, good pasture conditions have kept cattle on grass and these will be coming out over the coming weeks. This will keep feeder prices sideways/negative before small numbers take affect. October is near the CME index so no clear direction is available. Futures have maintained our support area, but this looks to be tested again. Feeder cattle will try to form a base here (96-97), but needs live cattle prices to remain steady and push higher. 
 
 
Lean Hogs: 
 
Direct hog markets were mixed with the IA/So.MN direct market at $48.82 down .45; Western cornbelt $48.96 down .60; Eastern cornbelt $47.54 up .35; and the National average at $48.37 down .57
 
Pork Carcass Cutout Values
 
 
Loads
54.75
+1.12
38
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
426,000
425,000
431,000
2.15
2.158
 
Pork cutout; loins +3.63, hams +0.61 (43.46)
IA/MN hog weights 268.2 lbs vs. 268.9 wk ago and 263 yr ago
Sat slaughter 196,000 with 2.346 wtd and 2.346 yr ago
               
Hogs and Pigs report
                                          USDA       Estimate
All hogs and pigs on Sep 1      98              98.2
Kept for breeding                        97              97.4
Kept for marketing                      98              98.3
 
           
Lean hogs closed lower on the day. Futures traded lower behind the recent weakness in the pork cutout, but managed to rally into the close ahead of this afternoon’s hogs and pigs report. The report numbers were all within estimates so do not expect any major reactions next week. Hog numbers are getting smaller, but the numbers do not show major liquidations so the market will continue to focus on supply/demand issues. This continues to look negative/mixed. The total slaughter number for the week is the same as year ago, but weights are 5 lbs. heavier. This appears to have started affecting packer bids, as cash prices are lower for the week. However, the cutout was higher today to give a bit of encouragement into next week. Demand remains a big question mark in the fourth quarter.  
 
 
 
 
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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.