Frozen Beef Stocks Down Three Percent
By Dennis Smith
Follow me on Twitter @denniscattle
Thursday January 23, 2020
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.
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.
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