What's ahead for Cattle and Hogs- by Paul Nelson

Published on: 17:11PM May 28, 2010
                                               
866.433.4371     
 
 
05-28-10 
Live Cattle
Feeder Cattle
Lean Hogs
LCM0
90.52
-1.05
FCQ0
108.42
-0.07
LHM0
81.85
+0.67
LCQ0
89.25
-1.52
FCU0
108.50
-0.10
LHN0
82.60
-0.10
LCV0
90.77
-1.00
FCV0
108.15
-0.25
LHQ0
82.80
-0.10
 
Index
108.41
-0.74
Index
82.93
-0.89
 
Live Cattle: 
 
·        Futures Market Open Monday Night 5:00pm
·         KS 93.00; 4300 hd.
·         IA 95.00; 150 hd.
·         Mid Day Beef Ch 164.18 (-0.65); Se 156.28 (-1.24) 136 lds
·         June Options expire close of business Friday June 4
 
 
Live cattle- Settled lower of weak outside markets and surprise “long asset fund” liquidation. The roller coaster continues- the down side influences-outside market, fund liquidation. Verses support from- choice/select @ 7.96 (green cattle), exports, and expect strong weekend clearance. So the question of the week; who will win? Weekend weather should help clearance, 7.96 Choice/select spread and previous “out-front” sales should lend underlying help to next week’s live trade.  Though, liquidation remains our primary market driver for the moment, OI for the wk was down 10k; still plenty of work to be done.
 

 

Boxed Beef Cutout Values
Choice
Select
Loads
164.03
-0.80
156.07
-1.45
216
Choice/Select spread settled at +7.96
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
130,000
130,000
129,000
671,000
631,000
 
 Feeder Cattle: 
·         May FC Final settlement 108.41 -0.14 from Thursdays futures close
The market remains pinned until the next round of feed yard inertest. Now that the weight of May index is behind us and Aug expiration is over 60 day away we are looking for feeder futures to recover. MTD private placement data is suggesting placements well above YA which should put On Feed at or near 100% for June 1st.
 
 
Lean Hogs: 
 
Direct Live Trade Wtd Avg
National
76.55
+0.58
14,218
IA/MINN
78.00
+1.75
4837
W. Cornbelt
77.46
+0.96
6709
E. Cornbelt
75.74
+0.43
7509
 
Pork Carcass Cutout Values
Cutout
 
Loads
86.85
-1.10
87.5
Slaughter
Wk Ago
Yr Ago
WTD
Yr Ago
389,000
388,000
425,000
1,924,000
1,822,000
 
 
·        






  • New Trade rec
  • Lions tumble-down 4.57 @96.88
  • Sideways to lower trend to remains
  • Futures Markets Open Monday Night 5:00 pm
 
 
 Lean Hogs- settled mixed as June was supported in late session buying @81.85 up 0.67; while July and Aug on “asset type fund” liquidation and near session lows. Technical resistance has formed @ 82.10-82.25 remains in place and we would expect it to be tested Monday/Tuesday.  What’s ahead from here? side ways  to liquidating for the next few weeks; look for a small push higher into month end but otherwise we look for seasonal trends to take over for now. Producers continue to add weight, this will become more difficult in the coming weeks but with B/G holding 270+ the market has room to give before above normal temps can be an issue. At current prices, exports appear to be the “Tipping Point” for higher prices- Sharp drop in cut out will be the catalyst for lower prices as long as weight follows the seasonal trend.  
 
 
Best regards,
Paul Nelson
 
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