Early livestock comments
Packers have opened with $112.00 bids in the south. Asking prices are mostly $115.00 to some at $116.00. Cattle in Nebraska are priced $4.00 over the June board. Ideas are that the market will trade lower this from the bulk of trade last week, which ranged $114.00-$115.00 on a live basis. We are leaning towards $113.00, where a few cattle traded on Friday. Packer margins remain in the red despite the rally in cutout values last night. It will take a lower cash price this week to put them right unless the beef continues to rally strongly into the end of the week.
The choice cutout was up $1.93 at $179.13 last night, with the select up $1.23 at $171.48. All primals moved higher except for the select loin and choice flank. Even those two were down only slightly. There appears to be a resurgence of demand ahead of Memorial Day after the recent sharp discounting has made prices more attractive. We also hear of improved ground beef demand.
Cash hog calls are mostly steady this morning, though some firm tones persist. Iowa/S. Minn barrow and gilt weights dropped 1.6 lbs last week, confirming that producers had marketed hogs very aggressively. Packers have to make the decision of whether to pay up to secure hogs for late this week and early next week, or cut kill schedules. Margins remain poor, but are improving as Memorial Day demand surfaces for fresh pork cuts.
The pork cutout gained $0.89 last night as loins and butts continued to rally. Loins were quoted 4 cents higher, and butts were steady to mostly 3 cents higher. It appears the hoped for surge in demand ahead of Memorial Day is finally surfacing. Processing cuts were not established by the USDA. Other sources indicate hams were about steady, as were bellies.
Written by Robin Fuller. For more information or trading ideas about this market, Please contact us at (312)896- 2001 or email us at email@example.com.