The Dollar is Weakening Today Which Should be Supportive Toward Cattle Futures

MORNING LIVESTOCK REPORT���������������� Friday December 3, 2010LEAN HOGSI begin writing with a sad heart today. Legendary Cub baseball player, and broadcaster, Ron Santo died last night. He'll be missed by many, especially those of us who suffer from the same affliction Ron had, being a Cub fan.Cash hog prices were mixed to slightly higher yesterday with the cash outlook for today mostly steady. Lean hog futures rallied during the course of trade yesterday. Judging by the increase in open interest, it appears that fund buying was responsible for the surge upward yesterday. Open interest was up by nearly 3,000 contracts in the Feb and up by over 400 in the April and June. Perhaps the buyers were some of the same players who have been aggressively buying the cattle over the last seven or eight sessions. I'm not picking up anything in the pork fundamentals that tells me the hogs will be able to hold under the weight of increased production over the next few weeks. I'm trading from the short side and we added to short hedges yesterday for my hog producers. I did nothing with my spec traders; we're holding our short Feb positions for a decline into late Dec.LIVE CATTLELive cattle futures staged a downward correction yesterday against the current uptrend. Prices, however, did manage to close off their session lows. Look for solid support near yesterday's lows in the Feb, Apr and June live cattle. Some clean-up cash trade occurred yesterday with large numbers of cattle secured by the beef packer this week at higher money. I see nothing on the short term horizon that changes the current beef situation. Look for a fully steady to higher cash steer market again next week. While the job report was disappointing today with only 39,000 jobs created during Nov, I continue to hear good things in regards to the U.S. economy and how it relates to beef clearance. The dollar has turned lower in response to the jobs report which is supportive to live cattle futures. I'm expecting a higher close today. My first upside target in the April fats is 110. Should this level be reached today, I'll be taking some length off the table.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.�Dennis Smith has been a full service commodity broker specializing in grain and livestock trading for over 20 years. Dennis has a wide range of customers, many of whom are grain and livestock producers. Dennis develops and helps execute hedging and speculative strategies in his Daily Livestock Wire which is prepared each afternoon exclusively for his customers. Dennis grew up in Central Illinois before launching his brokerage career.

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