Kleist Comments


CATTLE: Cash cattle so far: $143.-144.00 So., $145.00 Neb. and $232.-235.00 dressed; on 129 boxed loads cut outs higher @ up. $.63 @ $231.79(c), up. $1.07 @ $221.16 (s) on good demand; Carcass Equivalent: $217.96 up. $.28.
COMMENTS: If just playing the charts, June cattle is in a buy area with the likely risk a close under its major m/a’s at $137.95-137.80; some funds deserting the ship? Open interest fell 3,400 (led by the June but still…), volume moderate. Big discount, great looking beef market and the
expected shortfall of PEDv hogs this summer would seem bullish. Key word “seem”. I believe cattle is the last of the true futures markets and that’s why I sometimes ask what is it telling us? In other news: cold storage beef stocks a bit surprisingly nearly unchanged on month.

Interior cash hogs @ dn. $1.23 (w) to n/e (e), rough avg. $n/a: Pork cut outs fell $.25 @ $113.37 (narrowly mixed). Lean index 05/21 @ $111.72 up. $.23
COMMENTS: Cash hogs mixed ahead of a 4-day kill week? Cold storage report was negative basis trade estimates but not sure that will matter much. We are supposedly coming into ‘crunch time’ for the kills to drop off a log due to PEDv and recent lighter kills have bulls sniffing the stalls. Open interest fell 2720 led by June off 3800 amid moderate volume. Probers of the long side futures should be out and now one ponders if the new swing lows a bear trap? Again, if playing for PEDv the best bet might be call options or call spreads, etc. The spread between June and lean index not that large but still above the top interior I/M’s $108.00. And keep in mind the top was put in March 18th, quite awhile ago and all through the bullish talk.
NOTE: USDA ANNOUNCES 120,000T BEANS SOLD TO CHINA & 210,000T SOLD TO UNKNOWN, ALL NEW CROP. Wonder if China’s long our futures?

Kleist Comments

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

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