This past Thursday we had the Cattle on Feed report, which showed a significant increase in placements. This shows us that we have a lot of cattle for our forward supplies.
After the long weekend, the market opened on the highs on both feeders and fats and then began to fall. The long weekend had the ability to turn markets, along with a huge fund long position in the cattle and short position in the grains.
We need to see if these markets can maintain their present course or if the funds decide to abandon ship on their positions.
Choice box meat yesterday traded at $234.48 and Select $222.64. The $233 mark had been big resistance. We held over that. Now it will be time to see if summer cookouts support this market.
Composite box meat movement also came out showing negotiated 22-day-and-up sales at 1,464, NAFTA at 106 loads, overseas at 890. These are all good figures for the demand side.
Last week we traded cattle in the Southwest at $126, $129-$130 in the Midwest, $206-$208 hanging. This is $2 higher than the previous week. Fat cattle at Dunlap today traded $125-$132.50, which is unchanged to $4 higher on the top. The market hasn’t seen any more deliveries since last week.
We have satisfied the plant protein shortage we’ve had for quite a few years and have turned it into a surplus. Now we are working on the animal protein situation. We have opened up new markets worldwide. The United States, along with other meat-producing countries, are exporting their products.
The next 60 days are when some of the best meat consumption occurs in the United States and we will see how much is needed to satisfy the world.
Both the cattle and hog markets have enjoyed very good rallies; now we need to see if this continues or not. Like any other food, there is only so much meat people can eat.
We’re all up in the air about China’s pork consumption. I would bet that China owns most of the meat they plan on purchasing or have made provisions in the futures to cover their needs.
We started out with a very cold and wet spring. Now we have moved to warmer weather. Some areas continue to get way too much moisture where others have dried up. The planters have started rolling in our area and are moving along well where the conditions are right.
We have the ability to plant a tremendous amount in a very short time with the machinery we have. We need to watch this.
In our area we have not had much rain for the last two weeks. We are promised some at the tail end of this week; only time will tell.
Here again the funds are very short in the grain market. They will probably have more influence on what the grain market does. particularly if they decide they do not want to be short anymore.
The stock market is finding news every day to help it move sideways, but it will need much more good news to help it go higher. We are supposed to have some news regarding the tariffs around the end of May or first of June, but we’ve been receiving promises for almost nine months and promises only last for so long.
Good luck and good marketing.
This weekly report is for informational purposes only and is not to be construed as an offer to sell or a solicitation to buy the commodities listed herein.