Thomas Elwood: Early livestock comments
Packers maintained their $96.00 bids on Wednesday in the south, though there was one bid of $97.00 in Kansas briefly. In the north, packers opened with $96.00 live and $153.00 dressed. Trade is certainly possible today. Although the cutouts and packer margins continue to slip away, feedlots are very current and will try to keep the market at least steady. Keep an eye on the board for direction; that could be the key this week.
The choice cutout was down $0.69 at $158.28 last night, with the select down $0.60 at $151.43. Volume was much better than the noon report indicated, and buyers clearly stepped in more aggressively in the afternoon as discounts continued in most primals. Ribs were the exception and bounced nicely after dropping sharply in the past couple of weeks. Packers did ease back just a touch on slaughter Wednesday, reducing the kill by 2,000 head from last week. We will see if there is follow through today.
Cash hog market calls are mostly steady this morning. Packers are done for this week, and are mostly bidding on next week's hogs. The pork cutout is holding together well enough that they apparently feel comfortable bidding mostly steady.
The pork cutout gained $0.22 last night. Bone-in loins were unquoted, with boneless setting back just a bit. Butts were quoted as "weak" and the weighted average on bone-in dropped about a penny. Hams continue strong. Middle weight hams bumped back to 90 cents last night, up a penny from Tuesday. Bellies were steady to 4 cents higher.
Last night's CME weekly storage report showed an out-movement of 415 mill lbs compared to an out- movement last year of 1.552 mill lbs. Stocks now total just 9 thsd lbs compared to 27.198 mill lbs last year. Freezers are empty. This is a major reason processors are forced to pay whatever packers want for product; there simply is no other alternative.