Dennis Smith from Archer Financial Services, June 23rd 2020



By Dennis Smith

Follow me on Twitter @denniscattle

Tuesday June 23, 2020


Cash is still called steady to lower. However, perhaps this will change after the trade absorbs the meaning of the monthly cold storage report. Pork stocks dropped a record 144 million pounds during the month of May. The is by far a record drop and compares with the normal drawdown of 15 million pounds. Total pork stocks were down 24% from April and down 26% from last year. With the exception of picnics, all pork cuts were drawn down significantly. Ham stocks are now down 28% from last year with bone-in hams down 24% and boneless hams down 31%. Belly stocks are now down 8% from last year with loin stocks now down 40% from last year. I don’t care how you slice it the draw down was significant and friendly toward hog prices. This should bring buyers to the board ahead of the quarterly hog & pig that is scheduled for Thursday afternoon.



The cold storage report was not overly meaningful for the beef. Frozen stocks did decline 13% during May but they still reside up 2% from last year. This tends to demonstrate the massive drawdown in pork stocks was due to the continued strong pork export pace during May. There was some late cash trade reported by the USDA on their late wire. The following trade was reported. TX 500 head at 95 cents, KS, zero, NE 2000 head traded from $152 to $155 in the dressed trade and IA 150 head at 100. The idea and evidence that cash is headed lower again this week should weigh on the board early today. The charts are in the process of breaking down. A close below 9400 in the Aug should usher in additional selling. I’m thinking an eventual test of 8600 is highly likely. We are positioned accordingly. There were zero new deliveries with the oldest long partly through Feb 14th.


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