Hogs: Previously, we had noted February was a disaster for cash hogs (-$12.05) but not so for wholesale pork (-$3.73). It appears part of that imbalance is not being corrected. Cash hogs are finding stability while cash pork struggles.
We are getting past the storm issues in this market. Also, we have to wonder if traders will soon take a stand on the April contract. Current prices are now holding $1 premium over cash hogs.
So because cash hogs took an incredible dive in February and we are at low prices in March, the market thinks there will be almost no improvement by April 14? That sounds a little off. Even if we have sharp demand problems, which we do, it is hard to suggest this market will not be on the road back up by mid-April.
This market should be cleared through storm backup in hogs soon. We still contend a change in mindset, to neutral/bullish, should be taken by mid-month…Rich Nelson
Cattle: For Wednesday's action we will point out that the large morning spike low was mostly erased by the end of the day.
Despite the large problems with demand, and they are significant, we still will note supply will be the next issue to discuss. Market ready cattle numbers, and therefore slaughter, will decline in the coming weeks as we market last year’s low placements.
Cash cattle traded at $128 Wednesday, which was equal with last week. Our target is for April futures to hit $132. That would imply a $133 cash cattle peak in the first week of April…Rich Nelson