Allendale Livestock Wrap-Up for 9/2/2009
Hogs: We got the strong pullback in ham prices yesterday that we expected. However, as we pointed out this morning, the key issue here is how the trade took this bearish news. Though futures closed lower today, it was not a panic driven sale. Additionally, as noted this morning, recent volume/open interest statistics showed that Tuesday’s strong futures rally was exactly what the market wanted today. Essentially, this market simply wants to be bullish. Also supportive, this afternoon’s wholesale meat report did not show another day of ham selling. Three of the top four cuts closed moderately higher. For the big picture the market is suggesting cash hog prices will trade pretty much sideways through Oct. 14 (tomorrow’s lean hog index will be 49.53/Oct futures closed at 49.07). Given the way this market wants to trade, we have to respect that. In other news, so far the continued “swine flu hysteria” stories the media is putting out is having no more additional impact.
Cattle:
Rich Nelson is 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
