Cattle Futures Higher
Livestock Morning Outlook
Live cattle futures held support Tuesday morning and closed higher on the day. Volume was moderate similar to Monday. Over the past 5 days Boxed Beef has been steadily improving. The US Dollar is cheap and won’t be surprised if next week’s exports don’t show stronger exports. However with strong spreads moving forward and weaker upfront price, contractors are likely booking beef now against higher prices for fall 2020 and into 2021. Daily boxed beef movement is just a fraction of the total kill. Majority of beef s being contracted. It is highly unlikely packers and meat purveyors are storing. If they had to store unpriced beef, current cash cattle prices would be dropping to pay for their storage.
With the big swings in the ham and belly markets, it is looking like hams and bellies have been “cornered. Now, hand to mouth daily buyers that need inventory have to pay up for what is available. It could be Mexico that has cornered hams and bellies. Mexico for years has been a consistent and strong buyer of hams and bellies. Hams and bellies have been cheap, and both lagged behind other primal cuts all spring up to July.
Pork market has been concentrating on China when year after year, Mexico buys more US pork than Mainland China and Hong Kong buy combined. It may be different in 2020 with huge 1st quarter buy from China, but since May, China has dramatically slowed down.
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