Thomas Elwood: Early livestock commentary
Cattle trade likely is done for the week after decent volumes traded on Thursday at $100.00 live.
Combined with the trade on Wednesday, volumes are very good and trade likely is done for the week.
Many were surprised by the $100.00 trade yesterday, even some feedlots. It is a very strong market for
this time of year, but packers were way out of position in many areas, having underestimated the number
of cattle that would be available to supply strong forward sales.
The choice cutout was up $1.01 at $159.42 last night, with the select up $1.16 at $152.12. Volume was
limited as packers raised asking prices sharply after paying up substantially for cattle this week. Almost
all primals advanced, with end cuts particularly strong. We expect to see additional advances today.
The USDA will release the August Cattle on Feed report this afternoon. The report is expected to show
smaller placements during July, a reversal of several months of strong advances over light placements
last year during the pits of the recession. Marketings are expected to be about unchanged, with numbers
of cattle on feed up about 2%.
Cash hog market calls are steady/higher in the East and steady with a weaker undertone in the West.
Some packers are backing away from the market after paying up earlier in the week. There are concerns
that pork is getting near to a top with slaughter now expected to exceed last week's level.
The pork cutout lost $0.04 last night. The decline in value is one of the mysteries of how the USDA
calculates things. All retail cuts were steady or higher last night, with boneless loins sharply higher.
Buyers are beginning to resist prices after several days of strong price advances. Hams were unquoted
again as were bellies. This afternoons Cold Storage Report is expected to show smaller ham stocks than
last year, and very tight belly stocks as of the end of July.