Hogs: This week’s kill will run about 1% lower than last year when it is all said and done. That is better than the 2% lower posted last week and the 6% lower seen from July through September. In addition to the extra hogs, weights are an issue. This fresh corn has the hogs eating eagerly and gaining quickly. The Iowa/Minnesota weekly report showed a 2 lb. jump in live weights last week. More hogs at better weights means we have flipped from a supply restricted environment to one well stocked. We are still interested in the July/December futures spread and will monitor it closely.
Cattle: You may not believe it but we have seen six straight weeks of declines in wholesale beef prices. That also translates into cash cattle. The good thing to note is this week choice is up 81 cents while select is up 2.06. This is great news. We would not be surprised to see cash cattle rebound and confirm last week’s $95 is the low for some time…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.