Hogs: Tuesday's Cold Storage report was a surprise. Stocks of pork jumped from 1% higher than last year in December to 10% higher than last year in January. It was interesting to see that even with strong support from a rebounding corn trade, lean hog futures were more focused on Tuesday afternoon’s report. While everyone knows about production levels in January, we have to guess at both export and domestic demand. The larger than expected jump in stocks implied demand from one or both of those demand categories stumbled.
Cattle: After Tuesday’s rough price action, Wednesday’s picture looks a little better. After three weeks of losses in wholesale beef, we have seen prices stabilize in the past two days. That does not change the negative margins implied from packers buying $110 cash cattle, though…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.