Weekly cattle & hog report for Oct. 29

Allendale Livestock Wrap-Up for 10/28/2009

Hogs: Getting the cash hog news out of the way first, we will note early morning trades had a lower bent while end of the day sales were made about right on yesterday’s price. Having said that neutral news, the trade right now is noting cash pork prices are picking up. Yesterday the carcass report noted a 97¢ gain and today it was up $1.34. The current uptrend on the December is two months long and has picked up $12.00 in the process. We were on board the first $5.00 of the rally but feel the last half here will be considered overvalued territory when the dust clears on Dec. 14 (when futures settle to cash hogs via the lean hog index). Last week we noted volume had been drying up on the futures end and this market would be looking to find it again. The market has found that volume at higher prices. We tested the sell side with limited risk selling probes and have gotten our hand slapped. We will happily stand aside and let bulls run the show for now. Producers have been asking whether now is the time to reapply those shorts? They have seen the market post a good rally since we took the short hedges off in August. We still advise to hold off for now.

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

About the Author
Rich Nelson

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.

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