Quarta-feira, Março 14, 2012 em 9:25 a.m. Central:
Colocamos um pequeno 25 cents on pork product last night and for the first two days of this week we are 83 centavos mais altos. While this is nothing special, it does continue to worry traders that product might be getting better this week. Pork volume is good with the 2-day total of 215 cargas 16% over last week and 37% more than the first two days of this week last year.
We normally experience a mid-February to mid-April hog futures break on trader psychology turning negative as they look for a seasonal increase in slaughter putting pressure on product and cash hogs. June hog futures just had a February 22 a março 12 break of 525 pontos, helped by worries of high gasoline prices limiting grocery meat purchases. It is normal to expect June hog futures to bottom in mid-March as trader psychology goes back to the friendly side as traders begin to worry about the normal seasonal advance in pork product into June. This year this shift in psychology is being held back by a continued worry on disposable income for red meat purchases.
At the present time we see June hog futures holding a key 66% retracement area (9500) for the last five days. It is normal for a chart point of this strength to hold a market for 3 to 5 dia. Hoje é dia 6, and no one knows wparat to do. I came into the week expecting product strength to give us some small rally of 80 to 125 pontos, mas até agora, a 2-day rally of 83 cents in pork product on very good volume has done nothing.
I said yesterday that I don’t hear enough from pork brokers and floor traders to tell you to get long at this key chart area. There is very little to trade on and we must wait. There is one way to back into this trade this morning and that is to buy June hog futures against selling April. We had three units of this trade for over six weeks, and we liquidated early last week with OK profits. We want to put one unit of this trade on this week, anytime April is a minus 650 para 750 to June hog futures. Other than doing this spread, the place has turned into a major yawn.
We are long June hogs against short June cattle for the second time in the 2800 para 2950 area and would only liquidate should June cattle trade 3030 sobre os porcos de Junho para mais de uma hora.
Choice box beef was down 98 cents last night with select down a larger $1.35.
Beef packer operating margins are in the negative $35 per head area and although not good, it’s far better than the over $100 negative cutouts of several months ago!
The choice/select box beef spread has come in from choice being almost $20 over select to last night’s $1.23 prêmio. If there is going to be any depth to retail beef booking over the next two to four weeks, we are going to see a large widening in the spread again. A lack of choice gaining on select would confirm trader current concerns on limited upcoming spring/summer grilling business as consumers are spending $80 to fill their gas tanks.
Last week’s large 350- to 400-point break in cattle futures (gas concern) should see some sort of short term upside correction in April as warm weather forces early retailer interest. Este, por sua vez, could take June back to the $126 para $127.50 area and here is where we would add a second unit to our short June cattle (sold above $128.).
We have consistently said since March of last year that getting short June cattle futures in late March or by mid-April is the “holy grail” of cattle trading. Most years this trade will make 10 cents ($4,000) and last year it made 19 cents ($7,600) as an additional 10 cents was made in May on an 8% advance in the U.S. dólar (making U.S. exports expensive) and ever-increasing gas prices. Soa familiar?
We are short June cattle futures against long June hogs, for the second time, when June cattle trade 2800 para 2950 sobre os porcos de Junho. There’s nothing to do at the moment but watch.
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