Kleist Comments

MORNING MEATS 6/12/14
MORNING MEATS 6/12/14

CATTLE: Cash cattle last week: $145.00 So., $146-147.00 Neb. and $232.-$233.00 dressed; on 137 boxed loads cut outs mixed @ dn. $.69 @ $231.82(c), up. $.60 @ $222.95 (s) on good demand; Carcass Equivalent:
$217.34 dn. $.20.

COMMENTS: Never have another bad day? Actually heard that kind of talk. More realistically, can beef prices and movement hold up AND move higher once 4th of July bookings are complete? I’ll not dismiss that off handily since I am surprised beef prices are holding as well as they are (choice over $230.00). Granted, the much talked about from a month ago increase in fat cattle availability failed to materialize but then now begs the question: is the increase going to be delayed OR denied? Open interest little changed in total but noted a likely ‘roll’ out of the June into the Feb./Apr. contracts (up 2300 total) and likely met hedge selling at premiums. Volume moderate. August cattle acting well after making new highs and then backing and filling the charts. Weekly beef exports fell 60% to 6,700t might be a demand warning flag for the domestic market. Up trending market but still needs ‘reasonable’ stops ‘just in case’.

HOGS:
Interior cash hogs higher @ up. $1.05 (W), No/Comp. (E): rough avg. $112.60. Pork cut outs fell $1.22 @ $119.78. Lean index 06/06 @ $112.46 up. $.92.
COMMENTS: Cash hogs likely higher again? Only 2 suspicions were 1) Tuesday’s cut outs suspicious and changed yesterday and 2) opening western interior was quoted DN. $2.96 and ended up $1.05 late. The good news is I am starting not to care any more about the discrepancies. August hogs, where many are switching to catch the much delayed PEDv fireworks, have had a nice $15.00 up move since April 9th. If we all closed our fundamental eyes it would have been easy and profitable getting/staying long. But such is the life of trying to be reasonable as the premium to the cash increased to the now $17.00 level and means I still cannot fundamentally join in (again, I believe the USDA is right on numbers, but fortunately did not spec sell it). So, I look now for more a reason to short than buy it. Open interest rose 550 even as M/N fall 4,000, Q up 6800 (Oct. up 1,000), amid moderate volume; Weekly pork export sales fell 35% to 8,500t.

Kleist Comments

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

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