MORNING MEATS 5/02/13
CATTLE: Cash cattle so far $128-131.00. Neb. dressed $207.00; On 124 boxed loads cut outs: choice up. $3.10 at $199.49, select up. $1.79 at $189.83 on moderate demand. Carcass Equivalent: $187.55 up. $1.52.
COMMENTS: OK, on the surface we have: Sharply higher beef prices, improved movement, June’s stiff discount to the live, and technical improving as June makes more inroads over an old adversary $123.00. Logically, if the seasonal strength lasts another couple weeks June cattle should continue in its near term ‘buy breaks’ syndrome. Logical. Yet a I am not convinced I should take the market out of the “trading affair” category just yet. One can make just as much money trading air (basis vol./o-i) as one can in other circumstances. It’s just that prices can turn more sharply against one in such circumstances. In steps then perhaps: near term upside $124.00; near term support $122.58-122.39 (45-50 day), close under $122.06 (10-day) likely near term defense. Hedgers stay abreast of this rally, demand circumstances can change quickly in the week’s (or days!) ahead. As an aside: record high choice $201.18; beef weekly export sales fell 10% to 14,200t.
Interior cash hogs yesterday up $1.85-2.04 rough avg. $87.60 I/M and western corn belt; cut outs up. $.67 @ $86.36; lean index as of 04/30 at $84.54 up. $1.06.
COMMENTS: Cash hogs look good again as packer’s keep packing on cut out values (not quite in sync with these new USDA reporting’s though); open interest rose 1,175 led by October (!) up 1,134 with the rest little changed amid moderate/light side volume. June hogs advancing on the $93.00 and over level puts their near term upside objective $94.10; nearby support $92.10-91.67 with the 45/50 day major m/a’s at $90.63-90.53…except for hedges playing the charts for now. Weekly pork export sales: 8,000t vs. 12,700t wk. …these numbers do not appear to be full accounting enough to be useful?