Written Commentary
CATTLE
With a very strong demand outlook as the beef pipeline expands and consumer spendable income hits a short-term peak, the market looks to remain in a short-term uptrend. Traders see short-term consumer demand indicators as being as good as they get. Seasonal increases in demand are expected in the weeks ahead, and demand is enhanced this year by Covid relief checks and the strong urge for consumers to get out after a year of restrictions. Short-term corrections due to the premium structure of futures above the cash may represent buying opportunities. The USDA boxed beef cutout closed $5.30 higher at $244.83
LEAN HOGS
June hogs closed moderately higher on the session yesterday and the buying pushed the market up to new contract highs. A continued strong advance in pork prices combined with a seasonal decline in production continues to support. So far, exports have remained strong and the market is in position to see a continued advance in the cash markets. The USDA pork cutout, released after the close yesterday, came in at $105.30, down $1.21 from $106.51 on Monday but up from $104.28 the previous week. Traders are still absorbing the news from the USDA that pork supply is about 2% below trade expectations. The seasonal decline in production along with strong demand from the reopening of restaurants and food service industry has also lent support. The CME Lean Hog Index as of March 26th was 97.38 up from 95.97 the previous session and up from 92.71 the previous week.
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