Hogs: It was good to see the commodity spectrum rebound well from Tuesday's wide market selloff. Hogs led the way in Wednesday's rebound with a good 2.1% bounce in the June contract. This market is on the declining supply portion of the annual supply cycle. It is likely wholesale pork markets are reacting to that issue. If cash hog prices are already at $90, then where will they be in the heart of the tight supply in May and June? Our guess is $99 or higher…Rich Nelson
Cattle: Futures were unable to post much of a rebound Wednesday. That was a little surprise given the good export numbers noted below. The reason for futures trading only mixed, is cash cattle. Last week, Nebraska sold cattle at $196 dressed out. Tuesday, a few head were sold at $194. Wednesday, a few head were sold at $189. Realistically these are not a true market test. However, it is clear the direction this week will be down. This also marks the official end of the cash cattle rally…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.