MORNING MEATS 7/9/13
CATTLE: Cash cattle last week $119.00 south, $120-121.50 north; on 110 boxed loads cut outs: choice dn. $1.49 at $194.85, select dn. $2.60 at $185.13 on light demand. Carcass Equivalent: $179.90 dn. $.89.
COMMENTS: The beef slide a bit disquieting as it makes keeping cash cattle steady all the more difficult. Nonetheless, I have no problem with cash cattle dropping another $1-2.00 and will not negate the FUTURES having put in seasonal lows. Just limit the upside to the area I mentioned. Open Interest rose 1,786 amid moderate volume; C-O-T report: slightly bearish.
Interior cash hogs yesterday lower at dn. $.59/dn. $2.99 rough avg. $97.50; cut outs dn. $.32 @ $104.38; lean index as of 07/03 @ $103.41 up. $.20.
COMMENTS: Cash hogs look weak early but major storms moving in might see packers grab a few higher before it hits. Purdue Univ. says “record large drop” possible to producing hogs in 4thQ vs. 2Q (BUT, assumes $2.00 lower corn and $140.00 meal prices); would put cost to produce at $56.00/hw. dn. $13.00 vs. $69.002ndQ. Last ‘meaningful” range support $95.17 for the August, possibly oversold will save it; C-O-T report: slightly neutral/negative.