CATTLE: Cash cattle so far: TALK of some at $146.-147.00 south; on 100 boxed loads cut outs lower at dn. $3.99 @ $231.81(c)/dn. $3.24 @ $230.43(s) on light demand; Carcass Equivalent: $218.91 dn. $1.95.
COMMENTS: The drop in packer cut outs certainly SUGGESTS cash cattle could fall a much as $2-3.00 or more; add to that if feeders ‘sense’ a top in place they could exaggerate the situation. If not now, then later. Also, weekly beef exports sales fell to a routine 10,600t and I heard that retailers are reducing shelf space for beef. Open interest might now suggest hedgers (and specs?) a bit more compulsive rising 5,125 though spread from J/M/V, volume moderate. I have treated the market as a trading affair and consider: it’s been 5 days now since contract highs. $143.25 a likely bear defense area if selling rallies; if bottom picking there’s that gap at $140.60-140.45 that just might get filled. Hedgers hold.
Interior cash hogs mixed @ dn. $.27 (w)/ up. $.26 (e) with rough avg. (w) $79.00; pork cut outs up. $.01 @ $89.14 in a quiet trade. Lean index as of 01/28 @ $81.79 up. $.31.
COMMENTS: Cash hogs called higher for a increased Sat. kill apparently. Some talk retailers are allowing more room for pork due to the beef situation but I have not yet seen the pork product trade respond in kind. Even for weekly pork exports: fell about 6,000t to a more routine 8,700t (led by Mexico at 4,800t of it). Open interest rose 1,420 even as Feb. falls 1100 amid light-side volume. April’s premium remains a problem for near term buyers (consider this: cash hogs have to run up $15.00 in Feb. to justify April’s price…..could happen but the commensurate price of pork would be sharply higher as well). So, PEDv better kick in more noticeably to expect to make money on long $94.00 April. Still playing charts here on specs.