MORNING LIVESTOCK REPORT                   Monday October 26, 2009

LEAN HOGS

Cash hogs are called flat to lower today. While the cutout was higher on Friday the pork carcass lost value last week, under the weight of large production. Lean hog futures closed lower on Friday with open interest up 909 cars. Total OI has reached a record high at 155,544 contracts. We're approaching the end of National Pork month and with all of the headlines from the spread of the H1N1 virus, I'm expecting a slowdown in pork demand, at least in the short term. Look for a soft to lower early trade in lean hog futures this week.

LIVE CATTLE

December futures rallied to nearly 8800 on Friday and backed well off this high into the closing bell. I'm expecting this to represent stiff resistance for futures this week. While most in the trade are expecting additional strength in the cash steer market, the impressive cash move is likely approaching the end of the road, in my opinion. The beef cutout was higher on Friday as decent seasonal beef demand continued. Again, I'm not expecting this improved demand to stick around for more than perhaps another two weeks. I'm using recent board strength to establish hedges for my producers. My opening call is fully steady.

If you need help in developing and executing a hedging strategy in either hogs or cattle send me an email or give me a call at Dennis.smith@archerfinancails.com or 1.877.377.7905.

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The views and opinions expressed in this letter are those of the author and do not reflect the views of ADM Investor Services, Inc. or its staff.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright © ADM Investor Services, Inc.