Tuesday  10:15AM  9/24/11 - Very quiet overnight with pork product down 3 cents.  We are looking to be short October hog futures in the 8800-9000 area for the last two weeks.  We want to add if/when pork product starts its normal seasonal down into November.  Almost all years find this product weakness between Tuesday and Thursday of this week.  In anticipation of this weakness in pork product October futures have added 219 points to the discount against the lean hog-index over the last 6 trading days.  Over this same 6 day period December has added 296 to its discount.  Hog futures are now up to the correct technical area at the correct time to anticipate the seasonal product down.  Today's early up comes as all futures are sharply higher and this is taking hogs along for the ride.  Since we have a quarterly Pig Crop tomorrow (2PM) and as yet have not seen product weakening we can't add to shorts.  Sit tight with present short positions as we await tomorrows Pig Crop that is presently being called neutral.

Not much to say for cattle as Friday bullish cattle-on-feed still forcing futures higher.  Traders will now watch to see if a sharply higher futures market puts a bid to cash cattle and boxed beef.  Monday's limit-up in futures saw a 1,124 increase in open interest, but this is too small to mean anything.  Still a better than average chance that Friday's low could be the low for the rest of the year.  We will look to be a buyer on upcoming breaks as we normally get a 15% increase in cash cattle going into the February/April period.  With cash cattle now at $116.00, this would project late first quarter cash cattle over $130.00.  We will need present export pace to continue with no appreciable increase in imports.

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