Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
CATTLE COMPLEX
If you watch trade volume and you should, it was easy to see traders on Monday were unwinding and taking profits on short live cattle/long lean hog spreads. Since June 16th spreads have made big moves. The August live cattle/August lean hog spread had August cattle from the close on each contract from June 16th to July 17th move $31.75. At the same August live cattle were $16.14 under the average steer price and cash hogs were $6.55 under August futures. As markets move closer to August, the trade will move nearer to convergence.
Also, inter-market spreads in cattle have been moving from bull spreads to bear spreads.
LEAN HOG COMPLEX
With spread traders dominating lean hogs, fewer producers are using the CME to hedge and going to long term packer contracts. It is also easily seen on the pork side on the daily market. Buyers are contracting pork. Last week the average 5 daily negotiated load movement for pork sold on the daily market was 255.5 loads/day,
Interested in more futures markets? Explore our Market Dashboards here
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
