Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LEAN HOGS
Lean Hog trading was light Monday. Volume on June Lean Hogs was 15,506. From June on out traders were buying the summer months and selling fall and winter hogs. With negative packer margins, packers are going to tightly control slaughter. There are spec traders buying cattle and selling hogs, intra market spreads are bear spread, cash hogs and pork are dropping with negative packer margins. The positive side are exports but strong exports have failed to motivate hog prices as countries buy pork as an inflation fighter to increase supplies so they can decrease inflation.
LIVE CATTLE
With fewer cattle, it is possible there could be maybe small or possibly big packers that could have problems procuring enough cattle to meet previously contracted beef orders. If beef sales departments were aggressive contracting beef and they weren’t aggressive tying cattle contracts to the beef contracted, they still have to fill beef contracts. There are also packers that have their own cattle inventories and/or cattle contracted that won’t have problems. There could be beef contracted that isn’t meeting the supply of cattle for some packers. Ahead, there could be packers that have problems. The increasing cattle inventory in Brazil and Australia and their supplies of feed will make it hard for the US to export beef in 2023.
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