By Dennis Smith 312-242-7905 708-519-0678
Follow me on Twitter @denniscattle
Thursday March 25, 2021
Open interest continues to pour into lean hog futures. Total OI yesterday increased by 2,220 cars. This is bullish. Cash tops yesterday were confirmed at $98 and the bottom end of the cash has rallied to $88. This is bullish. The hog index may be trading close to $100 by the end of next week. April futures are just under 9800. The hog carcass is the key and it’s moving sharply higher. Weekly pork exports were 38,700 MT, down 2% from the 4-week average. The largest buyers were Mexico, China and Japan. Shipments were 38,500 MT, down 1% from the 4-week average. Same players on the shipping side; China, Mexico and Japan. Hog futures are trading at my first line targets (which I’ve pulled) of 9800 in the April and 102 in the Jun. I’m expecting higher prices into the April expiration. The hog & pig will be released today at 2:00. The trade estimates are not bullish. So, will the report come out as expected or will it pick up the herd contraction and disease problems that I’m focused on???
The cash steer market appears to be wakening from its slumber. The cash action is not overly dramatic this week but perhaps we need to walk before we run. The direction is higher and that’s the main point I want to drive home. IMO, we’re not going to see $1.14 cash steers for a long time. The beef is expected to continue cranking higher, likely reaching $250 in fairly short order. Beef export sales were 18,900 MT, down 3% from the 4-week average. Largest buyers were Japan, South Korea and China. Shipments were 18,500 MT, up 5%. Same players on the shipment side, Japan, South Korea and China. We’re looking to buy weakness in the Oct LC to re-establish a long position. April LC options expire one week from today with all markets closed one week from tomorrow for Good Friday.
For a free 30-day trial to the evening livestock wire that includes a morning livestock report and a midday pork and beef update, send an email to: email@example.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.