MORNING LIVESTOCK REPORT                       Monday June 10, 2013

Lean hog futures finished last week on fire and settled near their session highs which also represents recent highs. June has made it all the way to 9800 which has been a target for some of the bullish traders. I find
it interesting that July and Aug hogs are discount to the soon to expire June. I don't trust the hog market up here, not with exports continuing to decline. April pork exports, released Friday, were down 11.9% from last year. This represents 20.4% of production. It's my opinion the hog market will not be able to sustain these gains without more help from the export arena. At the moment, I have no spec position with the exception of still holding the June 90 puts which will expire worthless. If/when I see concrete signs of a top we will pile into new short positions. My hedgers are working sell orders in the fall/winter hogs and we're preparing to purchase some Aug puts.


Sideways to lower remains the theme of live cattle futures trading as we begin a new week of trading action. The cash steer market traded late Friday at $1.22 in the S. Plains, down 2 cents from $1.24 the previous week. NE cattle on the hot beef traded in light volume late Friday at $197-198, down $2 to $3 from the previous week. I'd expect a sluggish cash market again this week. Beef packer processing margins have narrowed substantially. April beef exports were down 13% compared to last year while beef imports were up 8.5%. There's not much constructive in the beef export/import data. This market is searching for a summer low but it's not clearly established yet. Some believe the cash steer market will trade below $1.20, in the weeks ahead, before the summer low is established. I'm still waiting and watching before making any trading decisions. I'm hoping for a bounce in feeders, given the weakness in corn prices, to provide an opportunity to secure some Sep puts.
We'll see.

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