Hogs: Futures did a fair job in coming back from that test of 74.00 support. While it looked good on the chart, we cannot say the picture has changed. Wholesale pork closed down for the fifth day in a row. Cash hogs were lower. Packers are seeing ample hog supplies show up at the front door. While there was a disruption in Wednesday's kill due to a plant in Illinois, it should only be a short-term issue. Lastly, the morning’s news of tariffs lasting for five years on chicken exports to China was disappointing. On the pricing end, October looks to be fairly priced at $72 to $73. Producers should have 75% of expected marketings through April locked up…Rich Nelson
Cattle: It was a little disappointing to see cash cattle trade, again, at the $97 level. Light sales yesterday afternoon and more active numbers today were made $2.50 lower than last week. Also concerning, wholesale beef prices posted another lower close. With these negative issues in front of us, the easy question to ask is why futures closed higher? We can simply point to the stock market for today’s direction. The Dow has a last trade up 250 right now. In the big picture we feel traders may still be concerned US consumers are not ready to buy beef “with both hands”…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.