MORNING MEATS 7/10/13
CATTLE: Cash cattle last week $119.00 south, $120-121.50 north; on 127 boxed loads cut outs: choice dn. $.53 at $194.32, select up. $.72 at $185.85 on moderate demand. Carcass Equivalent: $179.52 dn. $.38.
COMMENTS: Time to focus back on technical that has served us well the last couple weeks. Recently, cattle open interest has shown a propensity to ‘add-in’ rather than ‘net loss’ as August liquidates. At the same time there’s a tilt to hog open interest losing ‘net’ longs when front months liquidate. That’s at least near term friendly and explains why the premiums have been holding. Nonetheless, August still unable to get by my ‘wall’ at $123-124.00 and unless cash cattle rises this week, a sell-off should be in the cards with the worst of it $1.50-2.50, but in no hurry to short it as I am basically bullish in here.
Interior cash hogs yesterday mixed at dn. $.59/up. $.55 rough avg. $98.70; cut outs dn. $1.08 @ $104.21; lean index as of 07/08 @ $103.36 up. $.12.
COMMENTS: Cash hogs firm early as packers ply their magic: early yesterday I/M and western Corn Belt quoted down $2.39-3.31 with futures closed then apparently had to scavenge a couple hours later. I/M wts. few .5lbs. on week (heat last week?) but still up 3.9lbs. on year; open interest fell 2,963 led by N/Q off 6300 amid good volume. August hogs just barely held low-end range yesterday but held nonetheless. As such, perhaps a corrective rally is in order but tough to play for. Pork trade showing sustained (overall) weakness?