MORNING MEATS 6/27/13
CATTLE: Cash cattle last week $120.-121.50, Neb dressed $195.00; on 177 boxed loads cut outs: choice dn. $1.06 at $196.51, select up. $.59 at $186.57 on moderate/good demand. Carcass Equivalent: $181.91 dn. $.62.
COMMENTS: I see where some commentators headline cattle with ‘speculative’ buying rallies prices but that’s a bit misleading implying outside interest in new longs. Not so: open interest fell another 4,598 led by June/August off 5600 amid moderate volume. Nonetheless, I am satisfied with the action in the August in that futures lows likely in whereas cash lows maybe not. New swing highs overnight but look for $123-124.00 to provide more solid resistance. We’ll look to buy a break and advise. Weekly beef export sales: sharply higher at 20,000t led by HK at 5,600t of it.
Interior cash hogs yesterday mixed at dn. $1.01/up $.08 rough avg. $98.75; cut outs up. $.91 @ $110.15; lean index as of 06/25 @ $103.50 dn. $.16.
COMMENTS: Cash hogs called firm early as the packer’s magic pork trade keeps plugging higher, led by bellies up $4.30; open interest rose 1895 on moderate volume; Pig Crop avg. est.’s: All 100.5%/Breed/ 100%/Market 100.5%; July hogs topped yet? $101.80 high still in place but so far July’s break just a correction for now (August similar formation). China says pig prices back to profitability after government buys up stockpiled frozen pork at inflated prices…..now hopes producers will respond by increasing production (I have my doubts about that, especially with credit crunch); U.S. also stockpiles pork as per record high storage stocks for last several months; weekly pork export sales 18,600t up strongly on week led by Mexico at 9,600t.