Hogs: Futures did a great job in coming back from Wednesday's morning’s limit down losses. Newswires suggest it was profit-taking before the end of the quarter. That makes for a nice story but does not make sense as other commodities did not see such a large decline. Either way, the message is clear. The trade attempted a steep price break, and it was rejected.
Cattle: Active trading at $120 and $121 was seen on a live basis Wednesday. This is a new record high and represents a $7 gain over last week’s $113 and $114 level! There was even talk of $123 in Kansas for shipment elsewhere. This continues the “tight supply” market we are currently trading in. Keep in mind Thursday morning’s weekly beef export sales number should also be good. As noted Tuesday, a separate USDA report, which gives a preview of last week’s exports, held higher numbers than the previous week. Those hopes were helped by Wednesday morning’s comments from two meat companies noted in the hog comments. One company said steady sales to Japan while the other steady to better sales…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.