MORNING LIVESTOCK REPORT                  Thursday May 8, 2008

LEAN HOGS

Good morning! Lean hog futures continued to rise with another strong close on Wed. The exception was contained in the July and Aug with a wild spread close. The Goldman roll took place in the electronic trade (4,000 spreads in the Jun/July) but someone placed a large spread order (in the pit) going the opposite way of the roll. However, the lack of Goldman roll orders caused a big distortion with July futures dropping hard. July actually posted an outside day lower close but most of the other hog contracts closed strong. June futures appear powerful and the back end is poised to challenge their contract highs today. Pork demand continues in an impressive and in fact unbelievable way. The cutout was up 1.69 last night at 78.32. Just when it appears the cutout might falter, renewed strength was noted in nearly all primal pork cuts. The seasonal tendencies indicate the futures market should top. I thought they already had. We'll see. My opening call is higher.

LIVE CATTLE

Live cattle futures spent most of the session lower on Wed but staged a late recovery and closed steady in the front end but higher in the deferred contracts. Indeed, the Oct and Dec contracts are poised to penetrate their contract highs in today's action. I'm picking up some cash activity late yesterday in NE at steady to slightly lower money. Overall, however, I'm still expecting a steady to higher tone for show list cattle in the S. Plains. Cash cattle traded mostly at 92 cents last week. Aggressive box beef volume is the story of the late afternoon with 353 boxes reported and 126 trim. The choice beef was up .03 at 155.00. The aggressive cattle slaughter remains in force with 126,000 hitting the kill floor yesterday. The weekly slaughter is running 20,000 head above last year. I'm looking to liquidate part of my length at 105 in the Oct live cattle which might happen today. If you're interested in trading live cattle or lean hogs and would like the assistance of a full service broker send an email or give me a call. My opening call is fully steady.

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

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