Cattle, Hogs, and Dairy
Weekly Export Sales Highlights
Beef: Net sales of 27,900 MT reported for 2021 were up 19 percent from the previous week and 45 percent from the prior 4-week average. Increases were primarily for China (9,000 MT, including decreases of 100 MT), Japan (8,800 MT, including decreases of 500 MT), South Korea (6,000 MT, including decreases 400 MT), Indonesia (1,100 MT), and Taiwan (1,000 MT, including decreases of 100 MT). Exports of 19,400 MT were down 1 percent from the previous week, but up 4 percent from the prior 4-week average. The destinations were primarily to Japan (5,400 MT), South Korea (4,900 MT), China (3,500 MT), Taiwan (1,300 MT), and Mexico (1,300 MT).
Export Adjustments: Accumulated exports of beef to the Netherlands were adjusted down 33,589 MT for week ending May 13th. This shipment was reported in error.
Pork: Net sales of 45,900 MT reported for 2021 were up noticeably from the previous week and up 56 percent from the prior 4-week average. Increases primarily for Mexico (21,800 MT, including decreases of 700 MT), China (9,600 MT, including decreases of 400 MT), Japan (7,700 MT, including decreases of 200 MT), Canada (3,000 MT, including decreases of 400 MT), and Colombia (1,100 MT, including decreases of 100 MT), were offset by reductions for Peru (100 MT). Exports of 47,800 MT were up 38 percent from the previous week and 11 percent from the prior 4-week average. The destinations were primarily to Mexico (16,800 MT), China (13,500 MT), Japan (4,800 MT), South Korea (3,000 MT), and Canada (2,200 MT).
Live Cattle (June)
Surely, we sound like a broken record by now, with the market still lingering around our pivot pocket, 117.15-117.85, for the seventh consecutive session. This happens to be right in the middle of our risk range, which we have defined as 113.875-114.175 for support, and 119.825-120.35 for resistance. We are expecting to see a move off our pivot and would not be surprised to see it be to the upside, as one could make the case for an “inverse head and shoulders” formation forming over the last month. With that said, the upside potential seems somewhat limited, unless we see a bigger shift in fundamentals. Cash has not budged much recently, which has kept things in check. Even if we do get more bullish catalysts to help elevate prices, the shot clock is winding down in June, so you may want to temper your expectations..........Click this link to read the FULL report and receive our daily commentary
Previous Session Bias:
Feeder Cattle (August)
August feeder cattle opened higher and traded into our resistance pocket, 158.00-158.975, ultimately failing and finishing in negative territory. In recent reports we have talked about the volatility in corn spilling into feeder cattle futures and in yesterday’s report we noted: “If you get corn right, there’s a good chance you’ll get feeders right.”. That will likely continue to be the case until grain futures can find some sort of equilibrium. Due to the volatility in corresponding markets, the technicals remain in the back seat (though constructive)..........Click this link to read the FULL report and receive our daily commentary
Previous Session Bias:
Lean Hogs (June)
June lean hogs made new contract highs yesterday, but it was short of a clear-cut breakout move. Regardless, the market is still in uncharted territory, which makes finding the next significant resistance pocket a difficult task. Fundamentals in China seem to be turning a corner, but we have not seen that optimism put a headwind in the US hog complex yet. Significant report comes in near 110, though it seems like a mile away, it wouldn’t take much to get there.
The end of May will mark the end of government participation in dairy product purchases. Now we go back to a supply and demand market that many will welcome. Blocks and barrels both traded slightly higher which brought the near-term Class III contracts out of the oversold range. Staying with blocks and barrels, the NDPS report had higher prices for the week ending May 22nd. Even as the spot trades moved down toward the $1.50 range, the sales report had an average of around $1.80 for each. The volume was strong so this could be good news for cheese. Short term bullishness may still be in order for Class III but any sign of weakness might be a good time to exit longs if recently purchased after the quick sell off last week.
Class III; Q321 neutral (short term bullish), Q421 neutral, Q122 bearish/neutral, Q222 and Q322 neutral
Class IV; H221 bearish, H122 bearish, Q322 neutral
Call/Text/Email, Oliver with any questions.
Oliver@BlueLineFutures.com and 312-837-3938
Follow us on our social media sites to stay on the pulse of our latest research and commentary!
Facebook - facebook.com/BlueLineFutures
YouTube - YouTube.com/BlueLineFutures
StockTwits - stocktwits.com/BlueLineFutures
Latest blog posts - bluelinefutures.com/blog
Blue Line Futures
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder.