MORNING LIVESTOCK REPORT              Tuesday November 17, 2009

LEAN HOGS

Cash hog prices are called flat to lower today. News is quiet. The pork cutout continues to hold up well with the ham market not yet staging a seasonal break. I fully expect the cutout to tumble in the days ahead. We'll see. Futures are treading water, testing the uptrend but currently successfully holding support. From a hedging standpoint, I'm encouraging my producer hedgers to take a hard look at the current premiums being offered by the board. Support in the Dec hogs comes in near 5400 with the 40-day moving average currently near 5345. I'm expecting a test of support levels in the near term. Look for a flat to mostly lower open by the time the pit session bell rings.

LIVE CATTLE

Live cattle futures have closed higher for the past two sessions. I'd rate the upside recovery as "very weak" and strongly indicates fresh lows will be made later this week. The beef industry is currently in a transition, moving from tight supplies to more plentiful fed supplies and also experiencing peaking demand for beef. The one/two punch has sent cattle futures lower in recent action with fresh contract lows posted last week. One can expect stiff overhead resistance in the Dec cattle approaching 8400. I've been trading from the short side for both my spec and my hedge clients. Look for a resumption of the down trend to perhaps begin today. My opening call is flat to lower.

If you would like more information on this article, please contact Dennis at 1.877.377.7905 or send an email to dennis.smith@archerfinancials.com.

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