Thomas Elwood: Early livestock commentary
Showlists are mixed this week, and up slightly overall. Asking prices are $100.00-$101.00 live and $160 dressed. Although bids seem hard to come by, there was light trade at $98.00 in parts of Texas
Monday afternoon. Packers still needed a few cattle to finish out this week's kill. Feedlots that had passed the $98.00 last week had a change of heart after the negative reaction to the COF report. Sources indicate more trade is possible today. It is looking more likely that pricing will be no better than steady with last week.
The choice cutout was up $0.28 at $156.90 last night, with the select down $0.98 at $150.23. Volume was good for a Monday. Sources continue to note better interest in end cuts as the weather cools and consumers move away from grilling. The select loin value was down particularly hard last night.
Packers likely will keep slaughter scaled back a bit this week since margins have fallen hard, into the red according to some sources.
Cash hog market calls are steady the West and $0.50 higher in the East. Packers in the East are a little short of numbers into the end of the week. Slaughter is expected to exceed the 2.2 mill head mark this week. The cutout is holding together well, at least on paper, and they feel inclined to chase the market a bit to get needed numbers. We think forward sales for early October, national pork month, are fairly good.
The pork cutout gained $0.73 last night despite the fact that all primals except bellies were quoted "weak" by the USDA. Unless demand perks up today, we expect to see the cutout drop tonight. Bellies were unquoted again. Supplies remain tight.