Thomas Elwood: Early livestock comments
Showlists are mixed, but larger overall. The largest increase came in Kansas. Asking prices start the week at $123.00-$124.00 live in the south. Cattle in Nebraska are priced at $3.00 over the April futures contract. There are no bids yet, though some could surface today. The general feeling is that cattle prices will trade $1.00-$2.00 lower this week if the futures market continues to trade in a sloppy fashion. There is general investor uneasiness over the raising of the rating for Japan's nuclear disaster at Fukushima to "maximum", the same as for Chernobyl.
The choice cutout was down $0.49 at $190.10 last night, with the select down $1.76 at $185.50. Volume was very light again, even for a Monday. Weekend clearance was rated as average at best. Packers are struggling with building inventories of end cuts and more discounts are possible. Domestic forward sales perked up a little, but are still historically small for this time of year. Retailer likely are banking on holding out until packers are forced into discounts from the current high prices. Exports, on the other hand, continue extremely strong and are a big factor in keeping the beef cutouts together.
Cash hog calls are mostly steady this morning. Packers are expected to scale back on slaughter rates again this week, with slaughter nearer to 2.050 mill head compared to 2.069 mill head last week. Our sources report numbers still dictate an even smaller kill, and packers are not expected to be able to save much money.
The pork cutout lost $0.01 last night in rather slow trade. Butts were quoted mostly a penny lower. Loins were not established; demand is said to be lackluster. Hams were unquoted as well. Product is still fairly easily available, but we expect demand and reduced production to stabilize prices soon. Bellies were unquoted, but said to be about steady.
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TJE Cash trade information provided by Robin Fuller