US - If we look at full slaughter day comparisons both beef and hog slaughter was higher than the same period a year ago. Expectations are for cattle and hog slaughter this week to be higher than year ago levels, write Steve Meyer and Len Steiner.
Much of the conversation in the market at this time continues to focus around basis levels, both for cattle and hogs. While there were mixed reports as to clearance over Memorial Day we think many market participants viewed business as positive for meat proteins, helped by good weather in heavily populated areas.
Now attention shifts to business over Father’s Day weekend (which is getting more recognition in retail features) and then 4th of July celebrations. It will be interesting to see how ground beef business holds up during this period (the price of 50CL beef will be telling for ground beef business).
Feedlots have done a good job of staying current and marketing cattle aggressively and it is unlikely they will stop now. After all, it is best trying to market cattle now than roll the dice and have to deal with the normal slowdown in business in July and August.
As for hogs, summer futures are on fire once again as market participants consider the impact of seasonally lower hog supplies and a much more robust export market. Bellies, trimmings and hams have been slowly moving up and how well they track the seasonal trend will determine whether futures maintain/add to summer premiums or trim them down, as they have down twice in the last three months.
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