Written Commentary
MORNING LIVESTOCK FUTURES OUTLOOK
LEAN HOG COMPLEX
Technically, lean hog futures are becoming oversold, but there is a long side to hogs with spread traders short live cattle and long lean hogs which traders have a large position. But intra market lean hogs have wide bear spreads. Be watchful for a reversal.
The CME Pork Carcass Index to the CME Lean Hog Index is widening favoring packers. With the Lean Hog Index 7.70 under the pork index profit margins are positive. It is one reason packers are increasing slaughter.
LIVE CATTLE COMPLEX
Friday was the start of the S&P roll (Goldman Sachs). Traders will be liquidating/selling December and moving mostly to February and April. At the same time other speculative spreaders will be trading and possibly not how Goldman Sachs is moving.
Increasing beef imports are pressuring beef prices. The only bright side of the beef market are rib primals, but once the December holidays are over, rib primals normally sell off.
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