Tuesday Early Calls

| July 2, 2013 | 9:28 am
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Harold House with the Kansas City Trade Group touts there were 821 wheat deliveries in Kansas City on Monday. Click below to hear more on the markets from KMZU’s Mandy Young and Harold House from the Kansas City Trade Group.

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Early Livestock:   

 

CME hog contracts seem likely to open moderately higher, supported by the premium of the cash index, the beginning implications of the June 1 quarterly inventory and ideas that Friday’s sell-off was exaggerated. The cattle complex should start out on a mixed basis thanks to a slow combination of short-covering and residual selling interest.

 

With the last meat-friendly holiday of the summer now just days away, beef and pork producers are hoping that consumers will go extra heavy on the charcoal and lighter fluid in order to give demand one final push before the seasonal heat and humidity of July start to limit product movement. But while July 4th clearance could be good news for the business next week as retailers and food managers move to restock the shelves, spot demand for wholesale beef and pork could be on the sluggish side with meat buyers understandably taking a wait-and-see attitude.

 

Cattle:     Cash: Steady     Futures: Mixed        Live Equiv.  $136.36 – $0.06

 

The cash cattle trade would be typically light Monday morning with buyers and sellers concentrating on the distribution of new show lists. We look for the new offering to be steady to somewhat smaller thanks to better country movement generated on Friday. Initial asking prices will probably start out around $122-plus in the South and $195 to $196-plus in the North. Though packers have demonstrated a fondness for shopping on Friday’s this summer, the holiday Thursday should encourage them to complete procurement chores as early as possible this week. Expect live and feeder contracts to open on a mixed basis with spillover selling on one hand and short-covering on the other.

 

Hogs:       Cash:  Steady       Futures: 10-30 Higher                        Lean Equiv.  $117.75 + $0.45

 

Hog buyers should start work Monday morning with steady/firm bids. While packers may be tempted to open in slow gear, few may be willing to risk getting caught with an empty cistern right before the holiday break. It sounds like all plants plan to run on Friday, generating a late-week slaughter close to 40,000 head. At this time, the Saturday kill should total close to 60,000 head. Yet we should have a better handle on both these numbers by Tuesday. Lean futures are expected to open moderately higher, supported by the premium of the cash index and suggestions that Friday’s board crash board was not fully justified.

 

Early Grains:

 

Talk of China’s worsening weather problem in its wheat growing region sparked ideas of increased imports, supporting the wheat market overnight. The solid double-digit rally in winter wheat futures supported both corn and soybeans, though volume didn’t appear to be heavy.

 

Outside Markets:

 

Outside commodities were mostly higher in quiet trade. The Dow Jones Industrial Average closed 65.36 points higher Monday at 14,974.96. The overnight session saw the Dow Jones futures trade 32-points higher, indicating U.S. stocks could see continued buying interest Tuesday. The overnight crude oil market was $0.15 higher at $98.14 while Brent crude was $0.10 higher at $103.10. The August gold contract gained $3.90 to close at $1,259.60 while the U.S. dollar index is 0.152 higher at 83.206. Soybeans at the Dalian Exchange were higher while Malaysian palm oil contracts were lower.

 

 

 

 

 

 

 

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