Hogs: Right now, the waiting game in the industry is with cash hogs. Last week, we noted cash hogs could continue their September rally through Friday of this week. We are not sure if that would happen and did the first slew of our mildly bearish orders on Monday. Cash hogs were up on Monday and Tuesday but today’s morning update posted a lower number. When the trade confirms cash hogs are done with their September moderate rally they will start hitting the December futures. The seasonal chart of that contract shows the negative trend into late October discussed last week…Rich Nelson
Cattle: Throughout this year, we have noted numerous times our bullish sentiment for the 2012 supply picture. USDA expects beef production to fall a sharp 4.4% from this year. That totals 1.165 billion lbs! As the chart shows, they expect beef exports to fall a miniscule 138 million lbs. The US consumer is going to be left scraping the barrel looking for beef next year…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.
