Written Commentary
CATTLE
Good exports with South Korea finally coming back to the US. Exports. Exports likely up with slow down of exports over last month as packers having big problems with Coronavirus. If exports could sustain 25,000 each week it would be positive.
Cattle futures on Wednesday moved to resistance and on what used to be the post where floor traders had time after the settlement to match up all buys and sells, traders, algorithms, pushed prices up with August touching $3.00 higher. August did not settle up the limit. August Live Cattle settled at 101.30, up $2.50. On the post, traders gave cattle a strong push higher and then quickly took a fast profit. Wednesday’s trade volume was less than Tuesday when cattle were down.
HOGS
Pork cutout jumped up 5.76 early Wednesday with hams up 9.98 and bellies up 25.10. Loins were down 3.69. Why would hams and loins move up as much as they did Wednesday? Selling whole and half carcasses has been the majority of movement but if a buyer or buyer needs individual primal cuts, the seller needs to break down the carcass. Breaking down the carcass now means a buyer has to make up the labor and the seller needs the difference of other primals such as loins and today ribs. Don’t be surprised by the afternoon cutout that hams and bellies sell off of the up move in the morning unless they are going through a long term reversal. Pork is cheap compared to beef and compared to chicken parts broken down at the retail level.
Exports were strong with Mexico the biggest buyer which is not a surprise with hams and fresh bellies moving up. Mexico has for years been one of the best buyers of hams and bellies where they are trimmed out. China is buying but far from the large loads it took the first quarter.
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