Spot Wholesale Pork and Beef Prices Fell Apart late Thursday and continued breaking for the Friday’s AM quotes. This is FUNDAMENTALLY BEARISH for Live Cattle and Lean Hog Futures outlook for next week. Wholesale Meat pricing is a lagging indicator with Spot Hog and Cattle pricing is a leading indicator of market conditions:
These sharply lower values for meat suggest packer cooler inventories are potentially burdensome. This suggests that Pork and Beef Packers will be under strong pressure next week to reduce bids for Spot Slaughter Hogs and Fed Cattle prices next week to protect Kill/Cut conversion margin.
Friday’s AM posting for Wholesale Pork sold off sharply across all the major Pork Primal cuts; the Wholesale composite Pork Carcass prices were Pork prices quoted -$3.13 below the Thursday closing prices at $73.04 per cwt.; this is an unusually sharp price decline.
Wholesale Composite Choice Beef Carcass for the USDA’s AM quote was reduced by -$2.43 per cwt from Thursday’s closing price. The largest decline was reported for the Choice Beef Ribs, showing a more than -$10.00 per cwt from the Thursday closing price. This suggests that the bookings for Choice Ribs for the year-end holidays are slack; typically Wholesale Beef Rib values continue gaining until late November or early December. Wholesale fresh Beef 90% trimmings prices fell to new lows for the year suggesting hamburger grinder’s demand for lean trimmings is softening.
Futures markets have reacted violently to the downside in both markets today in what had been, yesterday and early today, a market that had experienced strong short covering near October lows in both markets. Long term charts remain negative in beef and feeders but have limited downside targets in hogs. In the last 20 trading days hogs are nearly $14 dollars cwt lower, down 20% . Ham prices should be unusually cheap going into Thanksgiving as box inventories are high and November kills could be a record.