CATTLE: Cash cattle so far: $146.00 south; on 67 boxed loads cut outs lower at dn. $2.24 @ $235.80(c)/dn. $3.39 @ $233.67(s) on light demand; Carcass Equivalent: $220.81 dn. $1.10.
COMMENTS: Our ‘crack’ in the beef armor did indeed show up as yesterday’s late wire indicates. The losses are now starting to eat into packer’s black margins and may not bode well for the producer. But, here we are again: Feb at $143.00 (roughly) already discounts a drop of say $5-7.00 in the live…..well, all of us have seen cash prices move in chunks opposite the existing trend. Cattle Inventory Friday: early avg. est.’s at All Cattle & Calves 98.5% and Calf crop at 98%; open interest rose 1600 even as Feb. drops 2,000 amid moderate/light volume. Nearby support is being tested at $142.70-141.90 (and they laughed at that yesterday!). I’ll leave that to the well heeled if buying but will suggest a likely bull defense a move/close under $141.58 and just for reference there’s that gap at $140.60-140.45.
Interior cash hogs mixed @ dn. $.05 (w)/ up. $.20 (e) with rough avg. (w) $79.00; pork cut outs up. $.48 @ $89.13 in a quiet trade. Lean index as of 01/27 @ $81.48 up. $.25.
COMMENTS: Cash hogs seen mixed again with weather still a factor. I/M wts. finally dropped but just by .8lb. on week and still up 7.8lbs. on yr. at 282.9…Ok slightly friendly on the week but eventually it WILL warm back up. April’s continuing premium being justified by potential kill disruptions over PEDv, here and in Canada (imports). Well, since I am currently only looking at the charts (price movement that happens to be called hogs), specs should trade accordingly until something PROVED. I do believe pork demand will get its day in the sun, haven’t changed that. But if I were to fundamentally buy I’d rather it in the Feb. while available. April technically has their ‘confluence of support’ at $92.65-91.82, close under the likely bull defense.