CATTLE: Cash cattle last week: $150.-152.00 south, $152.-154.00 Neb. and $245.00 dressed; on 91 boxed loads cut outs lower @ dn. $1.25 @ $232.54(c)/dn. $2.06 @ $222.95(s) on light demand; Carcass Equivalent: $221.56 dn. $.61.
COMMENTS: Cash cattle look lower this week and did see a few at $150.00 but too few for a test. Old school, I see an almost perfect and rare “distribution top” formed and suggests hedges should be held, and is in keeping with our spec trading affair stance. Open interest little changed even as April falls 2300 with the increase scattered among the back months, volume moderate.
Interior cash hogs higher @ up. $1.77 (w) to up. $.66 (e), rough avg. $126.75: Pork cut outs up. $.01 @ $131.60, mixed product. Lean index as of 03/31 @ $130.31 up. $.44.
COMMENTS: Cash hogs steady-ish early? Perhaps the packers are finally having trouble ‘adjusting’ the margins as pork seems to be stumbling. I/M wts. rose another 1.1lbs. on week and now up 8.8lbs. on year…..lot’s of tonnage filling in for PEDv? And if PEDv not as pervasive this summer? Just asking. Open interest fell 1,900 led by April off 1500 amid moderate volume. While the April contract must shadow the lean index, let’s look at the June: 1) failed to fill its chart gap at $129.35; 2) still posts a mini-island top; and 3) still posted a rare ‘death star’ candlestick formation. There’s only one way to show support or disdain for the Pig Crop numbers: trade it that way. I’ll have to side with the latter and probe the short side on a rally using a move over $132.25 as a likely bear defense.