Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LIVE CATTLE COMPLEX
Traders have been bear spreading cattle not because they are looking for increasing cattle numbers, but they are looking at increasing beef imports, fewer beef exports from the US and how consumers will continue to buy cheap beef especially if gas and energy costs remain high. The imported lean beef gives the consumers that live pay check to pay check from 60% to 65% of Americans what they can afford, cheaper ground beef. The same people that say, i can’t remember when we had steak.
LEAN HOG COMPLEX
Hams and loins have a combined price as of yesterday at $146.68. The combined price of bellies and butts was $201.10. The top 2 products, hams and loins, making up about 54% of the carcass are cheaper than two products carrying more fat and bone. Rib prices at $150.30 are about the same price of hams and loins. Picnics at $63.94 are simply cheap. Hams, bellies and butts have become dependent on the export market and with competition in exports , the US has become dependent on Mexico. Unless China buys US pork for reserves and Japan and Canada buy less from Brazil and the EU, it will be hard to increase exports.
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