HYPERLINK "http://www.allendale-inc.com/products/products.aspx" Allendale Livestock Wrap-Up for DATE \@ "M/d/yyyy" 3/4/2009
Hogs: Moderate to strong gains as April hogs maintain a seven-day uptrend recovery from contract lows. Part of the support is technical and part of it is seasonal. Also, there was the positive influence of the U.S./Overseas stock market gains as per pork demand. The unemployment situation in the U.S. and recessionary factors here and abroad remains a concern for a sustainable rally but perhaps pork exports will improve some, i.e. of late cash hams have added strong gains and improved packer margins. Hog futures were also aided by limit up March pork bellies. Cash hogs at the terminals steady/up $1.00; in the interior prices rose $.09-1.06 to an average of $56.00. April’s premium makes it vulnerable to sharp corrections if the cash hog market should lose its footing. An upside breakout depends on pork demand supporting it.
Cattle: Moderate gains as April widens its premium to the live cash market of last week amid hopes of improved beef demand here and abroad. That hope was facilitated perhaps by the rise in the global financial markets overnight and the strong gains in the U.S. stock market. Otherwise, choice beef prices were higher again at midday and since last week, beef movement has admittedly improved. However, forcing the prices back up could indicate the beef’s spotlight may be short-lived. ADP estimated February’s job losses at 697,000 and as such the U.S. unemployment numbers keep the demand-bear aspects of this market alive. After all, the April cattle have only been trading sideways the last 12 sessions through all the talk of a supply-bull market. Beef demand has been a spoiler.
John Kleist is an Ag Specialist at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com
