***** Cash Analysis: The activity is in the cattle market, not the hogs. Buying for Nat. Pork Month is all but over. Nov. brings a slowdown in red meat demand, with hams the primary pork cut that will hold firm into mid-month before having a slight dip. Other cuts will tend to be weaker, although McDonalds all-day breakfast may help hold trimmings/shoulder prices to meet the small bump in sausage demand. Hog weights are still edging upward. Hog numbers are still moving up as well, putting the pork complex toward its seasonal imbalance between supply and demand, bringing lower prices with it. And as we have discussed over the last few weeks, beef will be the red meat of choice into the end of year holidays. We think prices are positioning to slide to $60, with a chance base prices could fall into the high $50s when they bottom near the end of the year. It’s time to willingly price hogs.
***** Tech Comment: Hog futures have lost upside momentum, with today’s lower closes in contracts beyond Dec. suggesting the trend is ready to turn down. Dec. stalled at/under an initial target at $67.62 the last couple of weeks. It needs to fall under $63.60 to turn the minor trend down, but Friday’s close under $65.67 was an initial sign a turn down might be starting. Seasonally, it’s due for a shift. It needs to clear $67.62 to position it for a move up close to $70.00, but the inability to sustain strength has made that doubtful. Feb stayed under resistance at $69.50 on closes, and short of the last high at $70.45. There’s potential to move as far as $73.00 if it closes over that. The second close under last week’s $68.37 low is an indication its trend may be starting to turn down. A close under $67.80 all but confirms it. More distant months look even weaker.
***** Live/wholesale prices: Western Corn Belt cash hogs, $70.04, +1.32, #2 Pork Cutout $88.90, -0.41.
***** Daily Cash Recommendation: Wrap up cash sales early week. Plan next week’s for early week.
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