Kleist Comments

MORNING MEATS 2/03/14
MORNING MEATS 2/03/14

CATTLE: Cash cattle last week: $144.00/145.00 south, $146.00 and $230-232.00 Neb.; on 73 boxed loads cut outs lower at dn. $7.26 @ $223.49(c)/dn. $4.94 @ $224.85(s) on very light demand; Carcass Equivalent: $213.05 dn. $4.49.

COMMENTS: Rare to see that much of a one-day break in beef prices but that’s the consequence of the sharply higher run up when retailers balk. The question now is where will beef prices need to go to rebuild beef demand? Coin toss.

It seems beef topped out on MLK day at $236.56(c). Cattle Inventory report had cattle herd off 2% to the lowest since 1951 (one hell of a year!) but beef production ‘only’ the lowest since 1993; ‘down the road’ beef heifer replacement suggests rebuilding but that’s still a long way off. Open interest rose 4,860 in a large daily range amid strong volume. Hence a new mini-battle. Are Feb. prices enough for now at a still discounted level? Cash cattle back to $140.00 would likely equate to beef prices sharply lower still and might trigger back demand. For now, will watch and wait. C-O-T report: leaned bearish but might be already built-in (commercial rose strongly).

HOGS:

Interior cash hogs higher @ up. $.54 (w)/ Not/Est. (e) with rough avg. (w) $81.50; pork cut outs dn. $1.83 @ $88.49 in a quiet trade. Lean index as of 01/30 @ $82.16 up. $.08.

COMMENTS: Cash hogs mixed early with weather a factor on packer buying ideas. April hogs seem all PEDv-related as pork has not apparently caught on in a significant way from the retailers yet. Open interest rose 2,960 amid good volume; C-O-T report: leaned bearishly. Hard to argue technically with more new swing highs while trading technically in here but I lean near term negative $95.60-96.00, move/close over contract high at $96.45 for trading turns. By the way though, Russia apparently said they will restart turkey imports from us, while pork (stopped last year) “MAY” be restarted.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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