Hogs: You just cannot suggest a bear market that makes new contract highs for the first four contracts. That is what was seen on Wednesday. Traders are happy for the new export and import numbers from a few days ago. Also helpful was the rebound in corn. On the bearish end, you can point to the lower cash hog quotes as being a point of concern. If packers really had a resurgence in export demand, wouldn’t there be talk of reaching out for an extra hog or two and increasing a kill shift for Saturday? Current industry talk is that the weekend kill will still be weak at 35,000 head.
Cattle: There is not a lot of fundamental reason why psychology in this market has turned so supportive. April futures have rallied $2.90 in the past six trading sessions. During that same period, boxed beef was down $1.41 for choice and up 36 for select. Though the Friday/Monday update on exports and imports held great news, if it is not moving beef prices higher, we cannot say net demand is a plus…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.