MORNING LIVESTOCK REPORT Friday July 30, 2010
LEAN HOGS
Good morning. Profit taking appears to be the early feature in the electronic hog trade overnight. However, the very tight supply situation facing the hogs is not going to change in the short term. The board exploded yesterday with the deferred contracts penetrating the April hogs in impressive fashion. Production is declining this week and next week's production will likely be smaller than this week. Look for a two-sided trade but my guess is we'll likely experience a higher close, especially in the Aug.
LIVE CATTLE
Live cattle futures failed yesterday with the bearish technical action equally matched up with negative fundamental news. The cash steer market weakened yesterday with packers buying large numbers of cattle in the S. Plains at 92 to mostly 93 cents. This compares with 95 cents paid for cattle last week. In addition, the wholesale beef market weakened yesterday and this has been the trend most of the week. The sluggish beef is also occurring on slowing boxed movement. This is typical moving into Aug but it is not good news for the beef complex. Look for a mixed early trade likely followed with a lower close. It appears that feeders have topped as well.
If you would like a free two-week trial to my livestock wire which includes a section on the grain markets, give me a call or send an email to dennis.smith@archerfinancials.com or 1.877.377.7905.
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