Hogs: We had projected a dip in hog slaughter for the month of August. Numbers came in just a little lower than that. The real surprise, though, is that numbers have continued through September. The trade is now acting as though that shortfall will continue here.
“If they are short now, we should bet they’ll be short in the future” is the mindset. Next Fridays’ Hogs and Pigs report should shed some light on this issue. One thing we continue to monitor is the wholesale pork trade. In the past five days, pork was -0.69, -0.40, +1.42, -0.13 and now +0.22. As the trade slowly believes this smaller supply story, and we do not have solid information to confirm or deny future supplies; yet, we will hold off speculative trades for another day or two now.
Cattle: The trade is watching with interest on this week’s cash cattle developments. Feedlots have moved their asking prices up from $99 to $100 and $101. Packers, as of this time, are still sitting at $96. Last week had a $97 average. As wholesale beef has continued to deteriorate this week we only see steady money being traded. In other news, Dow Jones reports the average guesses for Friday’s Cattle on Feed report are -0.6% for placements, +6.2% for marketings, and for the feedlot herd to fall from +2.4% to +0.6%. As noted last night, those numbers appear outwardly supportive. Excluding this report, we are still longer term supportive with a target of $105 on the April…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.