Cattle buying interest could start to become
somewhat more evident at midday, and we could also see greater
definition in terms of country asking prices. Yet both sides are apt to
stay mum until the results of the FCE auctions are known later
Wednesday. Our guess is that significant trade volume will be delayed
until Thursday or Friday. Live and feeder futures are geared to open
moderately lower, pressed by residual selling interest and ongoing
problems in the wholesale beef trade.
It seems hog buyers will resume their
procurement chores Wednesday with bids steady to $1 lower. Most analysts
expected the Saturday hog kill to total close to 78,000 head. While
that's somewhat smaller than we've seen, it could be enough to cap a
total weekly kill just under 2.3 million head. Lean hog contracts should
remain on the defensive at midweek, checked by following selling and
unhelpful fundamentals.
| BULL SIDE | BEAR SIDE | ||
| 1) | For the fourth consecutive week, out-front (i.e., with delivery of 22 days or more) boxed beef sales last week totaled well over 1,000 loads (i.e., the four-week average now totals 1,110). Such a big book of orders commits packers to aggressive chain speed for much of the spring. | 1) | Cattle futures imploded on Tuesday with spot April live plummeting to its lowest close since March. It would appear the board is eager to lead feedlot cash lower. |
| 2) | If the cure for low prices is truly low prices, the struggling boxed beef trade could be firmly on the road to ultimate health; especially given the fact that the market is headed toward the finest hour of seasonal demand and featuring, with plenty of time for retailers and food managers to get their promotional acts together. | 2) | Wholesale beef prices continued to slide Tuesday with choice and select cutouts closing $1.74 and $0.96 lower, respectively. Additionally, box supplies were described as "moderate to heavy." |
| 3) | Although the wholesale pork trade continues to sputter and choke in the early spring period, most analysts believe that the cutout stands to be well supported under $75, eventually using that level as a base to launch a decent second quarter rally. | 3) | Barring a significant rally over the next week or so, the April lean hog issue may be getting ready to expire well back of where the February contract went off the board. Furthermore, the June and July contracts are trading at a discount to that level. Such an early market-top would signal very negative psychology and a lack of faith in renewed export strength. |
| 4) | Essentially trapped in the woodshed since mid-March, lean hog futures are beginning to look black, blue and technically oversold. We should be getting close to at least a small wave of short-covering and a correction. | 4) | Given the way hog futures are crashing to new lows this week (e.g., the June contract closed on Tuesday at $71.97, the deepest cut seen since Oct, 26), the mild post-report reaction last Friday was just a fluke with specs and commercials now coming late to serious bearish implications. |
OTHER MARKET SENSITIVE NEWS
CATTLE: (PR Newswire Association) -- The maker
of America's number one selling beef hot dog announced it has removed
added nitrites and nitrates * from all Ball Park beef hot dogs, and
eliminated by-products and added fillers from its meat line.
"Ball Park brand has always been about quality,"
said Colleen Hall, director, Ball Park brand. "Wednesday, we're taking
the lead by removing artificial nitrites and nitrates and replacing them
with natural alternatives, so people can feel even better when choosing
Ball Park beef hot dogs. Consumers want more transparency when it comes
to what's in the food they eat, and we want them to know we're
listening."
According to the National Hot Dog & Sausage
Council, an estimated 20 billion hot dogs were consumed in the United
States last year. During the core grilling season months, from Memorial
Day to Labor Day, Americans typically consume seven billion hot dogs --
which is 818 hot dogs consumed every second.
"The great taste of Ball Park brand hot dogs
hasn't changed," said Hall. "We took special care to make sure
everything consumers have come to love about our hot dogs stayed the
same. We're America's number one beef hot dog for a reason, and taste
tops the list."
The Ball Park beef core portfolio of hot dogs
are made with 100 percent beef and contain no artificial colors,
flavors, by-products or fillers. *Except for those naturally occurring
in the celery juice powder and sea salt.
HOGS: (farmersjournal.ie) -- All meat plants
caught up in the Brazilian meat scandal will not be able to export meat
to Europe, the European Union has confirmed. Speaking before the
Agriculture Council on Monday, EU Commissioner for Health and Food
Safety Vytenis Andriukaitis said while it is "not up to us to detect
fraud in Brazil", the EU will enforce the highest food safety standards.
"All consignments from establishments under review will be rejected and returned to Brazil," Commissioner Andriukaitis said.
He added that Brazil must be able to demonstrate the "reliability, predictably" of the food it exports to the EU.
Commissioner Andriukaitis said that an audit of
food safety standards in Brazil is ongoing and he hopes to have it
completed "after Easter but not before the middle of May".
It is now over two weeks since Brazil was rocked by the revelations of Operation Weak Flesh.
On 16 March, some 1,000 police raided 30
companies in Brazil, including JBS, with accusations of rotten and
dangerous meat having been sold and public officials bribed.
While Brazilian authorities have contained the
scandal, domestic prices in the South American country have taken a hit
in the past week.
Irish farmers are still waiting to see if prices here will receive a bounce on the back of the scandal.
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