Thomas Elwood: Early livestock comments
Cattle traded in Western Nebraska Wednesday afternoon at $106.00 live, down $1.00 last week's trade. A few cattle traded in Kansas during the early afternoon at $107.00 live, down $1.00 from the bulk of last week's trade, but those bids were soon pulled. Light trade later in the afternoon came at $106.00 live. Texas has yet to trade cattle. Numbers traded at lower money further north likely are large enough that it will take a good rally in futures to keep Texas from trading lower as well. Cattle traded at $108.00 in Texas last week.
The choice cutout was down $0.90 at $171.91 last night, with the select up $1.28 at $170.17. Spot volume was light for a Wednesday, with most of the shortfall coming in select cuts. We had thought that the decline in the choice cutout may have been due to light volumes at noon, but the volume in the afternoon seemed to confirm the trend. The entire decline came from a big drop in rib and loin values. What is even more notable about this is that volumes were large enough for the USDA to comment about it in their evening report. This is the time of year when middle meats usually see another big drop in value, and the break seems to be right on schedule.
Cash hog calls are mostly steady again this morning, with some weaker undertones expected in the West. Packers are well covered for this week and are making decent progress on next week.
The pork cutout gained $0.95 last night. Loins were quoted as mostly steady. Butts were mostly a penny lower. Ribs remained strong. Light weight hams were quoted steady, while heavy hams were steady/firm as the weighted average jumped a full penny. Bellies gained a nickel on continued tightness in available supply. Most bellies are being stored or sliced internally, leaving little to sell on the open market.
Last night's CME storage report showed a net in-movement of 455 thsd lbs compared to a net out- movement last year of 612 thsd lbs. Stocks on hand now total 59.655 mill lbs compared to 36.777 mill lbs last year.
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TJE Cash trade information provided by Robin Fuller