Thomas Elwood: Early livestock comments
Packers bids are fairly widespread at $96.00 coming into today. Asking prices are generally $100.00 live in Texas, and $99.00 in Kansas and Nebraska. Dressed asking prices are $157. Trade is possible today but packers are going to have to get more aggressive about bidding unless the board falls apart. We continue to look for a steady market this week.
The choice cutout was down $0.74 at $158.27 last night, with the select up $0.08 at $149.50. Spot movement jumped sharply last night, and it appears prices have finally fallen into buyers' comfort zone again. Slaughter is up 6,000 head so far from last week. Unless packers scale back on late week slaughter, it appears the total for the week will be up quite a bit from last week on the recent bounce in margins.
Cash hog bids are expected to be mostly steady today. Slaughter is up 7,000 head so far this week. Packer margins are good and they are willing to pay steady to keep the kill lines rolling. There has been a small amount of progress on the heavy-hog situation. Iowa/S. Minn barrow and gilt weights dropped a tenth of a pound last week. This is the first time since late August that weights went down for the week instead of up.
The pork cutout gained $1.01 last night. Loins were unevenly steady. Butts were quoted as "steady" but we note the weighted average on bone-in dropped 3 cents last night. Heavy hams were 2 cents lower. Other weights were unquoted. The industry is simply throwing huge numbers of heavy hams, almost to the exclusion of lighter weights. Bellies were quoted steady, though some sources still indicate a softer tone to the market.
Last night's CME storage report showed a net in-movement of 4.698 mill lbs compared to a net in- movement last year of 989 thsd lbs. Stocks on hand now total 18.017 mill lbs compared to 23.283 mill lbs last year.