Hogs: October hog futures have done a pretty good job of guessing where cash hogs will be, in our point of view. The cash hog market typically posts a good decline in cash hog pricing into the first week of September, and that is what has happened. Examining cash hog prices good through Tuesday, a less-than $4 discount, is currently implied.
With strong declines posted Wednesday for cash hogs and cash pork, -1.82 and -2.57, respectively, cash hogs will be getting very close to futures. This news sounds a little bearish, and it is. However, keep in mind this week is the normal time for cash hogs to bottom. Additionally, after several weeks of larger-than-needed marketings, we are about on the brink of switching to supply deficits in market-ready hogs. We are slightly supportive for the month of September…Rich Nelson
Cattle: News that Japan’s Food Safety Commission recommended raising the minimum age of cattle for U.S. beef purchases is great to hear. It will be a few months before this translates into purchases, but it is good news nonetheless. Japan used to be our top customer with more than 1 billion pounds annually purchased. For market direction, while we can’t argue with clear market signals, which are bullish, we would rather suggest more of a mixed tone this month…Rich Nelson