Kleist Comments

MORNING MEATS 5/2/14
MORNING MEATS 5/2/14

CATTLE: Cash cattle last week: $146.00Ks., $145.00 Tx. south, $148.00 Neb. and $235.00 dressed; on 102 boxed loads cut outs lower @ dn. $2.36 @ $230.34(c) dn. $1.31 @ $220.93(s) on moderate demand; Carcass Equivalent: $217.13 dn. $1.36.
COMMENTS: Better late than never as June cattle make new highs on bull-demand largely from its discount to the cash and renewed talk of less pork due to PEDv this summer. Also, was surprised that the retail meat report focused grocers on the beef and at lower average prices: $15-cuts $4.89 vs. 5.43 wk. And it wasn’t ground beef that was actually raised individually. Open interest little changed in total, some rolling out of June into the August noted amid strong volume. The boys are trading it. Looks like a bull-tilt but beware the whipsaws; should be good support $138-137.00.
HOGS:
Interior cash hogs higher @ up. $.59 (e) to up. $.36 (w), rough avg. $110.31: Pork cut outs fell $1.81 @ $113.08, fairly quiet changes except bellies. Lean index 04/29 @ $115.62 dn. $.60.
COMMENTS: Cash hogs called weaker again. The reported tilt for grocers to feature more beef evident in the pork trade’s sloppiness; looking at a chart, June hogs chugging along its major m/a’s at $123.83-122.27. And at premium to the live and lean index. If only we could get a better handle on this PEDv, life might be easier. My only real opinion is that the 10-15% summer decline in kill bantered about is too large and if so there’s a $10.00 back-draft under the market at least. But like unplanted corn, too early to act on. Open interest fell 1650 led by June off 3500 (Q up 1500) amid moderate volume.
If believed, the jobless numbers should have been supportive meat demand?

Kleist Comments

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

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