Hogs: Two days in a row of +$1.50 gains on the July have done a good job in changing psychology. The charts have now confirmed the double bottom formation we mentioned earlier this week and now project a move up to 94.67.
The popular explanation for the past two days of gains was that South Korea has jumped in and done some value buying. It sounds reasonable. Pork prices are back down to levels not seen since Jan. 27. Getting that price during summer, which typically has the highest price of the year, is a complete bargain. South Korea has been a ravenous buyer since last year’s disease problems caused the country to cull one-third of its hog herd…Rich Nelson
Cattle: Both Texas and Kansas traded cash cattle at $105 Wednesday. This helps alleviate some of our concern about early week action at only $104. This marks a $1 higher trade. While it is good to see, it was expected. We compute last week’s cash cattle purchase would put $68 back in the packer’s pocket…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.
