Outside Markets: Outside markets managed to stabilize yesterday but have reversed and are trading limit down in the early morning trade.
June live cattle finished yesterday’s session expanded limit up, that momentum could be halted today with outside markets looking questionable again. The cash trade has firmed up this week and boxed beef has been on fire, but the Board may be concerned of a reduction in capacity or closures. We have already heard of this taking place in Brazil. We still think cattle will be the place to be once the dust settles, unfortunately when that will be is the great unknown. This is a very fluid situation, so it’s hard to get overly excited about one good day (yesterday). As mentioned for the past several weeks, technicals are meaningless in this environment, so we are leaving them off until they get a chance to recalibrate.
June lean hogs managed to rally and close the gap from Friday, yesterday. Expect the volatility to continue, so if you can’t handle trading it, cash is your best position. Our optimism for lean hogs in this environment is muted, we think there will be better opportunities to come, in other markets and we want to be ready, willing and able to capitalize. Not chasing our tail around during this chaotic time.
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