Written Commentary
CATTLE
With a very strong demand outlook as the beef pipeline expands and consumer spendable income hits a short-term peak, the market looks to remain in a short-term uptrend. Traders see short-term consumer demand indicators as being as good as they get. Seasonal increases in demand are expected in the weeks ahead, and demand is enhanced this year by Covid relief checks and the strong urge for consumers to get out after a year of restrictions. Short-term corrections due to the premium structure of futures above the cash may represent buying opportunities. The USDA boxed beef cutout closed $5.30 higher at $244.83
LEAN HOGS
June hogs closed moderately higher on the session yesterday and the buying pushed the market up to new contract highs. A continued strong advance in pork prices combined with a seasonal decline in production continues to support. So far, exports have remained strong and the market is in position to see a continued advance in the cash markets. The USDA pork cutout, released after the close yesterday, came in at $105.30, down $1.21 from $106.51 on Monday but up from $104.28 the previous week. Traders are still absorbing the news from the USDA that pork supply is about 2% below trade expectations. The seasonal decline in production along with strong demand from the reopening of restaurants and food service industry has also lent support. The CME Lean Hog Index as of March 26th was 97.38 up from 95.97 the previous session and up from 92.71 the previous week.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
