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Livestock Commentary 4/24/09

Published on: 17:13PM Apr 24, 2009
 
(866) 433-4371         info@EHedger.com
 
 
Live Cattle
Feeder Cattle
Lean Hogs
LCJ9
86.85
-0.90
FCJ9
99.75
+0.20
LHK9
69.00
-0.55
LCM9
82.60
-0.875
FCK9
99.125
-0.075
LHM9
71.65
-0.225
LCQ9
82.975
-0.70
FCQ9
100.35
-0.325
LHN9
72.60
-0.525
 
Index
100.11
+0.05
Index
61.10
+0.85
 
 
Live Cattle: 
 
  • Co trades $88 live; IA trades 141-142 dressed
 
Live cattle closed lower on the day despite the sharply higher financial markets. Part of the blame can be found in cash prices of $88 when last week’s trade was $88-90. Although these cash prices were on the lower end of last week’s range they still carry a large premium over the June and August contracts. The bigger factor in today’s lower market was the lower boxed beef. Beef prices have posted considerable gains over the last several weeks, yet closed yesterday and today lower with some suggesting prices have run out of gas. Midday wholesale beef was lower with choice down 1.93 and select down 1.01. The April contract expires next week on the Thursday the 30th.  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.
 
 
Boxed Beef Cutout Values
Choice
Select
Loads
151.94
-1.48
150.08
-0.99
229
Choice/Select spread settled at +1.86
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
115,000
114,000
129,000
616,000
639,000
               
 
Feeder Cattle: 
 
The feeder market closed lower on the day, except for front month April, which expires next Thursday the 30th. April was supported by the discount is has to the CME index. Lower live cattle pressured other months, yet higher financial markets support feeders. Corn also displayed a mixed trade as it traded higher on the open, yet closed lower. Strong resistance still lies at the psychological figure of $100, then $100.55 (April’s high) and then $102.
 
 
Lean Hogs: 
 
Direct hog markets were mixed with the IA/So.MN direct market at $61.82 up .44; Western cornbelt $61.83 down .06; Eastern cornbelt $59.91 up .11; and the National average at $60.97 down .29. 
 
Pork Carcass Cutout Values
 
 
Loads
59.28
-0.50
65.5
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
412,000
418,000
402,000
2.11
2.104
 
  • Pork cutout; loins +1.04, hams +.11
  • IA/MN hog weights 269 lbs vs. 269.9 wk ago and 265.6 yr ago
 
Lean hogs closed lower on the day with commercial and fund selling in the nearby contracts late in the day. Hogs traded higher throughout the day from yesterday’s pork cutout gains, steady to higher cash hogs, and supportive outside markets. Yet, this was short lived as futures tumbled into the close. The cutout struggled throughout the week and reflects poor packer margins. The cutout has is once again priced below the CME index. If this continues next week, futures will be testing and trying to find support near previous lows. The slaughter was at 412,000 with a Saturday kill of 34,000 2,145,000. The cutout closed lower to finish the weak, yet loins and hams were firm. Bellies and boston butts were the cause for today’s weakness. IA/MN weights will be a figure to watch over the next month. Also, we will monitor a story today about swine flu deaths in Mexico.
 
 
 
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Regards,
EHedger LLC
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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.