Hogs sell off while cattle trade is mixed

August 1, 2012 05:15 PM
U.S. drought worsens...

Hogs: The hog market saw more liquidation Wednesday as the front month hog contracts were under pressure as Tuesday's major reversal turned the chart bearish. The U.S. drought continues to be getting worse. An additional 218 U.S. counties were declared disaster zones. Now more than half of all the counties in the U S have earned that ominous designation. With the drought expanding, it is forcing producers to liquidate their herd. With the negative chart pattern, herd liquidation combined with the seasonal increase in hogs coming to market the futures market should be under selling pressure near term…Jim McCormick
Cattle: The cattle market put in a mixed trade today as the trade marked time waiting for this week’s cash cattle trade. Bids are starting to come in at the 113 level while offers are at the 118 level. Where the cash market trades should effect on the markets next move. With the August futures trading five dollars above last week’s cash market, there will be incentive for producers to deliver cattle if the cash market does not move substantially higher. The August futures delivery period starts on Monday. Near term the market should struggle with weak demand while long term the market should find support due to herd liquidation…Jim McCormick

About the Author

Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Steve Georgy is a Sr. Broker/Manager at Allendale, Inc. Jim McCormick is Senior Broker/Manager at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com