CATTLE: Cash cattle this week: $148.-150.00; on 127 boxed loads cut outs mixed @ dn. $.93 @ $230.89(c), up. $.65 @ $223.60 (s) on good demand; Carcass Equivalent: $216.91 dn. $.20.
COMMENTS: Another conundrum? While buying August cattle on a chart seems expensive and dangerous, the price remains a discount still to the live price. I mentioned yesterday a ‘delayed or denied’ increase in cattle numbers and there’s also one for the beef itself: did the late spring allow better than expected domestic demand longer than usual? If so, then is the ‘worst month’ for beef demand (June) merely delayed and not denied? Retail-wise certainly seem the grocers are bending over backwards to keep beef the best possible and at the expense of pork. Father’s Day Sunday, nearing booking completion for 4th of July (at least on a Friday and better for demand) and well-overbought technically could rain on the bull-parade at some point. So for now, we’ll just keep mentioning using a well plotted sell-stop “just in case” if continuing to buy breaks.
Interior cash hogs higher @ up. $1.42 (W), up $1.54 (E): rough avg. $114.00. Pork cut outs rose $2.80 @ $122.58. Lean index 06/11 @ $113.69 up. $1.23.
COMMENTS: Cash hogs look higher as cut outs jump hard with gains for hams/loins/bellies; June expires today and July turns spot with a $11.00 premium and the August at a $16.00 premium to the June (more if using then lean index or avg. interior). A pure chartist has no such misgivings and technically in nirvana. Fundamentalists worry about things such as: what if there is no major kill cut off due to PEDv? what would the price of pork look like $15.00 higher basis live in just week’s? Guess we will let our left brain concentrate on charts and the right brain look for any sign of (futures) buyer exhaustion. Open interest rose 5,500! even as M/N fell 5100 amid good volume. More technical support, eh?