HYPERLINK "http://www.allendale-inc.com/products/products.aspx" Allendale Livestock Wrap-Up for DATE \@ "M/d/yyyy" 6/17/2009
Hogs: Wow. That is all we can say after seeing this afternoon’s wholesale pork report. After posting gains in pork prices in five of the last seven sessions, and getting futures a little supportive, we see the cutout dropped $2.77! We still suggest ‘true value’ of summer futures is $60 but with this cutout in mind we may attempt another break back towards the $58 level. In the big picture though, we have nothing out there suggesting this ridiculous export problem of ours is anywhere near ending. If exports do not change then we are looking at $50 eventually for December futures.
Cattle: We would like to see some type of higher trade help out cattle prices but simply cannot find much supporting things right now. It is true wholesale beef prices have wobbled a little higher this week. However, whether that translates into higher cash cattle prices is a separate thing. Newswires have posed guesses for Friday’s Cattle on Feed report. Those estimates, and Allendale’s, can be found at the bottom of the Livestock Fundamentals page of this report. The talking point for this report is a sharp drop in placements will be seen. Keep in mind we had a corn rally during the month of May and pastures improved in the plains. Both of those factors will keep those feeders on the grass. This report will be nice to talk about but keep in mind placements during the month of May will only affect slaughter levels from September on out. We still suggest cash cattle will reach to $78 and August futures will hit $80…Rich Nelson
Rich Nelson is the Director of Research 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
