Look for a typically quiet Tuesday as buyers and sellers cautiously assess this week's developing cash/board relationship. Our guess that situation will remain.ambiguous enough until midweek or later. Accordingly, bids and asking prices could be slow in surface. Live and feeder should open moderately higher thanks to follow-through buying and ideas of cash stability.
Cash hog buyers should open with generally steady bids. If cash stabilty continues this week, it would suggest that supply and demand are pretty much in balance. Through the month of March, it seems more likely that slaughter will hold like a steel rope more than pork demand. Seasinally, look for market hog to start tightening around mid April. Lean futures seem geared to also open higher, though nearby could once again be firmer than deferreds.
| BULL SIDE | BEAR SIDE | ||
| 1) | Feedlot managers distributed new showlists on Monday that were generally smaller than last week, especially in the South. | 1) | Though nice to see for a changed, yesterday's rally in live and feeder futures was probably nothing more than a dead cat bounce. It looked like oversold charts corrected with the technical picture changing very little along the way. |
| 2) | While triple-digit gains in cattle futures yesterday proved little by themselves, they were definite steps in the right direction. Further progress like this could stabilize charts, weaken basis levels, and lend feedlot managers greater leverage. | 2) | Early-bird estimates call for February placement to be 5-7 percent above last year. Extremely dry winter pasture conditions could have been responsible for more aggressive in-movement. |
| 3) | The pork carcass value surged significantly higher on Monday with all major primals reflecting better demand except the loin. | 3) | This week's hog slaughter is expected to be on par with last week at the 2.4-million-head level, an increase over last year by roughly 3 percent. Expect harvest levels to stay near 2.4 million hogs for at least the next three weeks. |
| 4) | The seasonal tendency for April lean hog futures is to chop around short-term before strengthening into contract expiration next month. And while the short-term trend in the April contract is negative for now, the longer-term trend still remains positive. | 4) | As in the case of Monday's cattle rally, the early week in lean hog futures proves virtually nothing in terms of a technical shift in prices. Spring and summer contracts continued to be held in check by multiple levels of overhead reistance. |
CATTLE: (Korea Herald) -- US beef imports shot up significantly last year, beating Australian meat to regain its No. 1 status in the Korean market for the first time in 14 years, industry data showed Monday.
Korea imported 177,000 tons of US beef last year, up 13.5 percent from 156,000 tons tallied in 2016, according to the figures provided by the Korea Rural Economic Institute.
Beef imports from Australia decreased 3.95 percent on-year to 172,600 tons last year, falling to second place in the foreign beef market in Asia's fourth-largest economy.
Australia had been the leading exporter of beef to Korea since 2004.
New Zealand came in third at 18,786 tons last year, down 16.5 percent from the previous year, and Canada came in fourth at 5,200 tons, up 15.6 percent.
The sharp rise in US beef imports is attributed to the free trade agreement between Korea and the United States that took effect in 2012.
US beef had been the most popular foreign beef in Korea up until 2003, after the country opened its beef market to foreign countries two years earlier.
The Seoul government, however, banned imports of US beef in 2003 after a mad cow disease outbreak was reported in the North American country.
As mad cow disease or bovine spongiform encephalopathysubsided in the US, Korea resumed imports of boneless meat from US cattle aged less than 30 months in 2008.
BSE is a transmissible spongiform encephalopathy and fatal neurodegenerative disease in cattle that may be passed to humans who eat infected flesh.
With the Korea-US trade agreement that went into effect in March 2012, US beef imports have continued to rise on the back of lower tariffs and low prices compared with Korean beef products.
HOGS: (National Hog Farmer) -- After President Trump's recent comments on the possibility of the United States rejoining the Trans-Pacific Partnership trade agreement, a group of 25 Republican Senators sent a letter urging him to consider rejoining the trade pact. Sens. Steve Daines (R-MT) and Mike Rounds (R-SD) organized the letter.
The Senators say, "increased economic engagement with the 11 nations currently in the TPP has the potential to substantially improve the competitiveness of U.S. businesses, support millions of U.S. jobs, increase U.S. exports, increase wages, fully unleash America's energy potential and benefit consumers. Increasing access to a region and market that has a population of nearly 500 million can create widespread benefits to the U.S. economy."
They also say, "Further, TPP can serve as a way to strengthen ties with our allies in the region, counter the influence of the People's Republic of China, and increase pressure on the PRC to adopt substantive and positive economic reforms."
Trump withdrew from TPP in January 2017, however, the remaining 11 TPP countries have reached an agreement and plan to sign the new trade agreement next week.
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