CATTLE: Cash cattle last week: $142.00 south, and $225.00 Neb. (some $142-143.00 live); on 124 boxed loads cut outs higher at up. $1.01 @ $211.99(c)/up. $1.70 @ $210.72(s) on moderate demand; Carcass Equivalent: $203.88 up. $.50.
COMMENTS: Feb. will expire and then April will be top dog and for now merely trading at current cash cattle prices roughly. The market is back to being bulled-up with tight supplies, consumers ‘forced’ to buy higher priced beef and the coming PEDv in hogs that is expected to deplete pork supplies in the summer. Go with that for now. The fact that packer’s are knee-deep red again should be of little consequence and perhaps, secret beef exports are making up for margin losses. Open interest little changed in total and curious: G/J falls 2,656 and the rest up nominally amid light-side volume. Not a very bullish stance on the surface. I am keeping to a trading affair stance and for now obviously a bullish tilt with concerns if April closes back under $141.00; contract high the target now at $143.20.
Interior cash hogs mixed @ up. $.21(w)/not/est. (e) with rough avg. (w $88.35); pork cut outs up. $.47 @ $95.27, mixed trade. Lean index as of 02/17 @ $87.41 up. $.84.
COMMENTS: Cash hogs called firmer on good demand though some of that reportedly stems from logistics. Not to matter. The market is clinging to the hard-to-pin-down PEDv in the U.S. and now Canada along with bird flu in China and some countries banning their live imports. Speaking of China, report out that the government there is buying pork for gov. stockpile reserves to stop falling domestic prices amid “abundant” pork supplies and pork prices down 8% since December (why import pork you ask?
Don’t ask.) I/M wts. crept up .2lb. to 281.2 and up nearly 5lbs. on the year. The April hog’s rally is accelerating leaving two gaps and will make it tougher to buy into maybe, especially if one is out of the market. I am not arguing with the rally again but I offer this: does one realize what the pork prices will have to be IF cash hogs are at $107.00-108.00 IN THE SUMMER? Hedgers keep a head’s up, commercials are. 1st gap $96.50-96.20. Very overbought. Open interest up 4,143 amid light-side volume. Beware the air.