Hogs: One of our favorite pork topics is China purchasing. Wednesday morning’s rally was led on news that China’s pork prices had reached record levels. This led U.S. traders to assume that also means China is actively buying U.S. pork to cool down those prices. The market always assumes the most exciting buying pace. The problem here is there is no timely data to compare against the hype. For now, we assume this continues the short-term support from National Pork Month procurement that always happens at this time of year. Look for this market to remain steady to higher into mid next week. After that, we expect the second leg of the summer to winter price decline to start…Rich Nelson
Cattle: Allendale has probably been one of the biggest bulls around the pen, so to speak. Having said that, this market has even surprised even us with its strength. Feeder cattle prices have been lit on fire and November futures filled our upside target of $140 on Wednesday. We did not expect that to happen until the month of November. The chart shows how futures are implying there will not be a seasonal break in feeder prices in the last quarter. The next two months normally see pastured feeders show up at the sale barn. This year, we expect them to come up short…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.
