MORNING MEATS 6/3/13
CATTLE: Cash cattle last week $124.00-125.00, Neb dressed $200.00.; on 135 boxed loads cut outs: choice dn. $1.90 at $206.65, select dn. $1.89 at $187.90 on moderate demand. Carcass Equivalent: $190.35 dn. $.77.
COMMENTS: Weekend weather in the Midwest was rainy, chilly and a likely BBQ hindrance. Cash cattle end last week steady live and weaker dressed. If retail demand was limp, much more crashing of the beef that started last week will weigh on the live obviously. But, are the futures discounts enough to cover it? So far it seems so. And put another way, should live drop to the low $120’s the commensurate drop in beef prices could end up friendly demand. I still lean to the idea of pent up ‘summer demand’ lurking in the shadows. But for now has been better just to treat as a trading affair. In that vein, off to the charts again: August cattle needs a close over $121.44-121,62 (45/50 day and a likely bear defense) ; $120.20-120.00 (20) support; close under $118.85 a likely bear defense area near term. Open interest little changed in total, June off 2285 but picked up spread across several months (no rolling, though that’s coming), volume light/moderate. C-O-T report: very neutral on very light net changes.
Interior cash hogs yesterday mixed at dn. $2.33/up $.87 rough avg. $91.35; cut outs dn. $.26 @ $93.80; lean index as of 05/30 at $94.26 up. $.22.
COMMENTS: Cash hogs look steady early. Late last week the pork trade showed signs of topping but no confirmation as yet. Pork is still cheap vs. beef though losing ground to poultry prices. The technical uptrend remains in place with a slight slowing of upward momentum; open interest little changed in total even as June falls 2374 and picked up across several months (like the cattle, not rolling but that’s coming), volume moderate; C-O-T report: leaned negative. Close in August under $92.22 a bull warning flag.