Mexico was largest buyer of pork last week By Dennis Smith
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Thursday August 6, 2020
SOYBEANS: For spec and hedge positions in the Sep soybean options, look to lift positions when Sep soybeans trade down to 870. Those with Oct soybean puts, recommend holding.
Cash is called steady. The cutout was up $1.54 at $67.04. A firm trade was noted in hams resulting in the higher carcass value. This is, perhaps, partly due to a sharp downward revision in the Tuesday kill, revised down by 15K due to the tropical storm that moved up the east coast early this week. Weekly pork export sales were reported at 30,300 MT, down 14% from the 4-week average. Mexico was the largest buyer last week, booking 12,900 MT with China booking 5,600. Shipments were strong, reported at 34,400 MT, up 6% from the 4-week average. Mexico received 11,600 MT of product while China took in 9,000 MT. These exports are good, they are solid, but it’s not enough to turn the current over-supplied market into an uptrend. We’re looking to sell Oct hogs on any trade above 5000.
Cash steer prices continue to edge higher while the board trades flat. So, the basis narrows with Aug at 102.30 with cash prices now zeroing in on $1.00. The closing beef report, out late yesterday, showed the choice down .67 at $203.57 with the select up .37 at $190.82. Weekly export sales were lousy at just 13,400 MT, down 35% from the 4-week average. Shipments were respectable at 17,600 MT, up 8%. We recommend establishing hedges in the Oct options and out into the Apr options leaving winter cattle unhedged for now. The trade in the country is bullish but I’m just not seeing any long-term bullish fundamentals. Hedging is advised.
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