Government reports driving hogs, cattle

Hogs: Long term watchers of the government reports on cash hog pricing have known that the AM report generally has lower prices than the PM or next day’s summary report. The last few days, the difference has been even more dramatic. The AM report showed losses in these days even though the final tally of hog prices ended higher. You could argue the AM numbers simply don’t have enough free market hogs, classified as “negotiated” on the report, to be a valid market test. Keep this in mind over the next few days and don’t panic over a lower AM number…Rich Nelson

Cattle: This Friday’s Cattle report is more a long-term update on supply for the industry to chew on rather than a market moving event. While we all have heard numerous updates and timely information on cow slaughter, let’s look at the other half of expansion/contraction numbers. We all know Southern Plains producers put a bunch of heifers in the feedlot (+5.6% as of Jan. 1). Allendale feels heifer retention fell 4% this past year. The trade holds a more moderate 2.1% smaller view…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.