MORNING LIVESTOCK REPORT                  Monday November 9, 2009

LEAN HOGS

Lean hogs closed lower in the first three contracts on Friday with the summer hogs slightly higher. While the early cash call for today is looking steady to possibly higher, I'm expecting a lower tone in the cash market to be prevalent by mid-week. The pork cutout value was quoted lower Friday and I'm also expecting more weakness in the hog carcass value this week. Finally, despite solid support from the outside markets, I'm expecting a lower open likely followed by a lower close in hog futures today. Today marks day number two of the Goldman roll. Despite the roll, total open interest from Friday's trading action was up 1,378 cars. Look for a flat to lower open. If the Feb pit session hogs gap lower today I could represent a seven-day island top.

LIVE CATTLE

Live cattle futures plunged through support levels Friday and finished sharply lower, confirming that futures are now in a down trend. This development is something I had been expecting for several weeks. We're fully hedged and even went short early Friday for many of my spec clients. Last week's cash activity was unusual in that trading started on Monday and continued sporadically during the week. However, it appears that show list numbers may not have been depleted. Also, on the negative side of the fundamental fence is the fact that last week's kill was down from the previous week yet the cutout value began to slide downward late last week. The beef cutout was slightly higher on Monday and Tuesday, unchanged on Wed, and soft to lower on Thursday and Friday. The outside markets are supportive today with the stocks and crude oil higher and the dollar probing to its recent lows. Unlike the hogs, I'm guessing that live cattle can "grab hold" after a lower early trade and show some recovery potential. Look for a flat to lower open with the possibility of a higher close.

If you're not satisfied with your current brokerage relationship give me a call or send me an email to dennis.smith@archerfinancials.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.