Livestock –
Cattle futures seemingly found support around recent lows and shot higher yesterday. It also appears that the beef pipeline is getting a bit more cleaned up and demand could be better going forward. Keep in mind Monday’s kill will be slightly reduced due to the holiday, but that will support beef prices on the margin. We have the FCE due today and one has to wonder if the mud-related discounts seen in the north the past few weeks start to fade away. This could narrow the range of the auction this week.
Hogs also shot higher yesterday. Part of this was probably an unwind of the prior day’s whacky price action but additionally we had the expiration of the LHG and the market likely viewed LHJ’s discount to cash as too wide. Still it is starting to sound like pork demand is starting to soften a bit and this will certainly be something we need to watch in the weeks ahead. Bellies have been a clear leader in the overall cutout surge so we should pay extra attention to their performance.
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