Dennis Smith from Archer Financial Services. January 23rd 2020

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Frozen Beef Stocks Down Three Percent

By Dennis Smith

Follow me on Twitter @denniscattle

Thursday January 23, 2020

LEAN HOGS:

I have to see it to believe it. Cutout needs to jump above $83.00 and spur an impressive move higher in the cash market. Neither have occurred yet. Futures are bumping up against resistance but these levels likely won’t be penetrated until the fundamentals drive them through it. Cash is looking steady to firm for today with winter storm activity hampering movement of animals. Massive downward revisions in hog slaughter in tandem with dropping weights is presenting the idea, the possibility that numbers are dropping off. Weekly export numbers will be released Friday morning. The cold storage report was not bullish, showing record large stocks of pork.

LIVE CATTLE:

Active cash trade occurred in the south at $1.24. The bull spreads performed strong yesterday with selling erupting in the back end of the market. Beef is expected to grind higher over the next several weeks if not longer. IMO the long term bullish fundamental development in the wake of phase one….effectively opening the Chinese market to U.S. beef has not been priced into the futures market. Demand, beef demand is outstanding. The cold storage report was friendly showing 3% fewer beef stocks than last year. Not sure if it happens today but look for the uptrend to resume with cash steer prices headed north of $1.30 and possibly clear to $1.40 this spring. If you have two minutes take a look at my two minute drill discussing the cattle market.

https://youtu.be/oqLov4Hnjgs

For a free 30-day trial to the evening livestock wire please send an email to: dennis.smith@archerfinancials.com<mailto:dennis.smith@archerfinancials.com>

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. This report is a solicitation.

 

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