Cattle: The electronic contract, which trades until 4 p.m., is trading 32 cents stronger than the 1 p.m. pit close. Traders have put in a slight premium to futures based on the afternoon Fed decision. One other factor to note is packers are finally doing more than talking about poor margins. Wednesday's kill, at 121,000 head, is 8,000 fewer than last week on the same day. That could support wholesale beef prices in the coming days if it sticks…Rich Nelson
Hogs: We cannot discount how important Russia used to be for the U.S. chicken export market. Up until this year’s trade spat issue, it was our number one foreign buyer. For the first eight months of this year, our exports were a measly 8% of last year’s level.
One trade spat ended in August, and supposedly restarted exports in September, but now we have a second one to contend with. It was announced that starting Jan. 1, the country will no longer allow poultry meat to be frozen before offered to consumers. This applies to both domestic and imported product.
This news also assures the trade there will be no U.S. product in their hands in 2011. For today, it could be argued this news was not market moving for hog futures. We already had problems with them before...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.