Hogs: Commodity liquidation was seen on Monday and Tuesday. Does that mean we can get it all back by the close? That may be a tough one to do. We can suggest a rebound is certainly due, though.
It was surprising to see Wednesday's rebound in futures was also supported by short-term fundamentals. Cash hogs were up $2 to $3 today. Packers were able to break prices for three days straight, but it appears that has ended. Cash pork prices have not fallen, which was a surprise to some in the trade.
Wednesday's 421,000 head kill was lower than expected. It now puts the week to date kill down 1% from last year at this time. That’s better than the numbers posted in early December. In the big picture, price breaks could be used for long position taking…Rich Nelson
Cattle: Wednesday morning’s report on employment from ADP was a clear surprise. The group reported job gains for private market employers rose from 92,000 in November on up to 297,000 in December. This has caused economists to raise their estimates for Friday’s master jobs report from the government. They now see job gains, from both private market and government employment, up to 175,000 from 140,000.
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.