Thomas Elwood: Early livestock commentary
The cattle market is expected to be quiet today, with trade finished for the week despite the fact that volumes were no better than moderate. Asking prices range $99.00 to $100.00 for the cattle being carried over into next week. We don't expect to see much in the way of bids unless the futures market falls apart and packers think they can pick off some cattle lower.
The choice cutout was down $0.86 at $159.01 last night, with the select down $1.26 at $151.90. Discounting was widespread as packers try to clean up coolers. Volume was the best it has been all week, but that isn't saying much. The industry will be lucky to move 700 loads of boxed cuts if interest doesn't pick up. Given the closeness to Thanksgiving, buyers are somewhat distracted by other meats.
It appears Russia is serious about protecting its growing poultry industry. As of January 1st 2011, they will no longer accept frozen poultry for import. This will keep U.S. exports of chicken to Russia at a minimum and could lead to cheaper protein alternatives for U.S. consumers this winter.
Cash hog bids are expected to be steady to as much as $1.00 higher today. Packers are becoming more aggressive about acquiring hogs now that their margins are strongly positive. Saturday's slaughter is still expected to run about 215,000 head, bringing the weekly total up over 2.33 mill head and helping to clear some of the heavy hogs from the market.
The pork cutout gained $0.03 last night. Loins were quoted steady/weak, with butts steady to a penny higher again. Hams were steady. The increase in slaughter this week is throwing a few more hams into the pipeline and capped the recent rally. Bellies were unquoted, but are said to be about steady.