MORNING LIVESTOCK REPORT               Monday October 5, 2009

LEAN HOGS

Lean hog futures closed slightly lower across the board on Friday with the settlements near their session lows. The Oct the Dec now look poised to test major support levels. I consider support in the Oct at 4880 with Dec support at 4780. Large supplies and record large production continues to weigh on the pork carcass value. Despite good demand for product, the cutout value lost .95 last week. Look for a soft to lower cash market today. My opening call is flat to down 25.

LIVE CATTLE

Live cattle futures closed lower across the board on Friday with the market pressing hard and closing into new recent lows. The technical action was clearly bearish with the fundamental developments during the course of the week also bearish. We experienced a lower cash steer market last week along with sliding cutout values and indications that beef packers were looking to cut back on the kills in an effort to get current red margins back into the black. None of this is friendly for cattle prices down the road. Having said that, however, I'm expecting some sort of rebound in prices this week. Look for prices to start out flat to lower before likely rebounding back to higher levels. The outside markets appear fairly stable early today. 

If you would like more information about this article, please contact Dennis at 1.877.377.7905 or email him at dennis.smith@archerfinancials.com.

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