Cattle and hogs incredible rise to all-time highs could be setting up for a just as incredible decline, or just a correction.

Market Pulse: Apr. 11, 2011

Last week June live cattle opened at 121.52 and closed the week at 116.950. In June lean hogs, the week opened at 103.575 and closed at 100.650. With both markets hitting all-time highs, what is next?

First, as the U.S. Dollar continues dropping, cattle and hog prices will rise. Second, feed costs keep on rising, which could hurt supplies. Speaking of supplies, the fact that as of Jan. 1, 2011 the USDA reported that the U.S. cattle herd is down to 1958 levels, and that the number of calves born in 2010 was the fewest since 1950, confirming possible supply issues well into next year. In hogs, there was an unexpected increase in the hog-breeding herd, but higher feed costs could slow this trend moving forward.

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