MORNING MEATS 6/13/13
CATTLE: Cash cattle last week $122.00, Neb dressed $197-198.00; on 174 boxed loads cut outs: choice dn. $1.20 at $201.79, select up. $.15 at $184.31 on good movement. Carcass Equivalent: $186.35 dn. $.63.
COMMENTS: Some support might be creeping into the market as pork prices generally have risen quicker than a drunk at an open bar. Once the retailer has booked all its needs for 4th of July, which should be done shortly, beef might be a needed fill-in at somewhat more reasonable prices than before. That argument might need some more big losses in beef prices however to work bullishly for a near term play. Open interest little changed again amid moderate volume (lots of day trades). August cattle still trapped between $121.00-118.00. Weekly beef export sales fell to 13,100t vs. 19,000t wk. not helpful but export shipments were a marketing year high.
Interior cash hogs yesterday higher at up. $1.70/$2.69 rough avg. $100.00; cut outs up. $1.27 @ $99.26; lean index as of 06/07/13 $97.48 up $.22.
COMMENTS: Cash hogs expected firm again as the packer cut outs skyrocket even as major pork cut values were mixed. There’s little overt bearishness to point to but I look at some cracks: 1) price rises in pork trapped retailers and July not a seasonally good demand time for pork, 2) the big increase in volume, and to a degree open interest, has occurred in the recent week and not in the start/middle of the move, 3) hedgers more ‘comfortable’ July/Aug. prices to lock in profits. After retailers done, the onus then on pork exports (China?) to keep prices moving higher. Speaking of which: pork export sales fell to 12,100t vs. 15,100t wk. and no China indicated.