Cattle, hogs marked by active weather trade

Hogs: The three previous trading sessions have been dogged by concerns about competing chicken prices, gas prices, and a lack of grilling demand due to the weather. We were happy to see Federal Reserve Chairman, Ben Bernanke, discuss the second issue on Wednesday. He indicated the Board of Governors does not believe there is much upside left to gas prices. Essentially, he said prices have hit their high end for the summer and consumers would get used to it. On the weather side, we cannot say relief is in the cards yet. The Eastern Seaboard, a key demand sector, still has above normal precipitation lined up in both the six to 10-day and the eight- to 14-day outlooks. We cannot say this market has the news it needs yet to make up lost ground.

Cattle: Active cash cattle trade was seen today. Prices were the same as yesterday’s $116 level. This represents a sharp $3 decline from last week. It is interesting that even with this move; the April was able to rebound a little today. With a normal 17 cent positive basis, April futures are implying $117.44 cash cattle. April expires on Friday. That seems a little high given the current action…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.

About the Author
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.

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