Kleist Comments

MORNING MEATS 8/22/14
MORNING MEATS 8/22/14

****Oops, I said in grains ‘serial’ options expire…just regular ones.

CATTLE: Cash cattle so far: $152.00-153.00 and $241.00; on 125 boxed loads cut outs lower @ dn. $1.09 @ $250.46(c), dn.$2.25 @ $240.82 (s) on moderate demand; Carcass Equivalent: $230.50 dn. $1.09.

COMMENTS: Charts trying to post a bottom like it did last week but remains to be seen if successful. Cold Storage report will probably be helpful this afternoon when we combine it with the cattle on feed marketing number; USDA’s July kills down 10% with beef production off 9%; open interest rose 1200 even as August off 1200 amid light moderate volume; No opinion change. One thing: when analyzing meats I try to put myself into futures prices i.e. will $145.00 cash cattle say, as per the October, and the causal price of beef actually be demand positive (let’s say choice back to $230.00?). It might be but cannot act on that now.

HOGS:
Interior cash hogs lower @ dn. $.84 (W), dn. $1.24 (E): rough avg. $96.00. Pork cut outs fell $1.43 @ $104.99. Lean index 08/20 @ $107.19 dn. $2.06.

COMMENTS: OK, yesterday’s action might have been a bottom but I am amazed some are calling it a “key reversal” and one called it a “massive key reversal”…as far as I am concerned a shot in the dark to drum up business. It fails on so many levels. That felt better. So where now? Charts are not a stranger to the move as late July and first week of August saw a similar technical occurrence; fundamentally our pork prices have not found a home yet and cash hog prices continue their trek lower; one somewhat positive is that I understand Russia now will allow western food imports passing through Belarus and Kazakhstan, to contain high domestic prices; USDA’s July kill recap had slaughter off 7% but pork production off (only) 2% on wts.; Cold Storage today has some interest to me, some estimates are off 10% on month and 10% on yr.; open interest little changed in total even as Oct. falls 1350 amid moderate volume; If we have seen a low—prove it technically as fundamentals as yet do not. Close/move over $98.00 likely bear defense position defense remains for now.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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