Higher cash took place for the second consecutive day yesterday. Today, who knows? The cutout was strong with hams and bellies leading the charge upward. Holiday ham demand should be solid for another week at least. Retail pork is soft and vulnerable to weakness. Bellies continue to see impressively strong slicer demand that continues to outstrip current record large production. Hog futures turned lower yesterday but not on high volume of trade. Total volume was only 42,000 with open interest rising by nearly 2,400 cars. Spec buyers countered with hedge type sellers. I’m bearish from a long term fundamental perspective.
Two items stand out in the live cattle market; first, there’s not been any cash trade yet and second, choice beef appears to have topped out. Both are important because the bullish traders have been talking about higher cash all week and they continue to tout the acute shortage of choice beef rib cuts. Choice ribs seemed to turn yesterday, offered higher early and discounted late. Look for selling to likely develop during the course of today’s session.
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The risk of loss in trading futures and options on futures can be substantial. The author does not guarantee the accuracy of the above information, although it is believed that the sources are reliable and the information accurate. The author assumes no liability or responsibility for direct or indirect, special, consequential or incidental damages or for any other damages relating or arising out of any action taken as a result of any information or advice contained in this commentary. The author disclaims any express or implied liability or responsibility for any action taken, which is solely at the liability and responsibility of the user. In addition, the author of this piece currently trades for his own account and may have financial interest in the following derivative products: (corn, soybeans, soybean meal, soybean oil, lean hogs, live cattle, feeder cattle).
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The risk of loss in trading futures and options on futures can be substantial. Each investor must carefully consider whether this type of investment is appropriate for them. Past performance is not necessarily indicative of future results.