If you’re hosting Thanksgiving and the clock is running, a bird in the hand (better yet oven) definitely beats two in the bush (i.e., freezer).

On the other hand, the old saw may not always successfully serve those speculating in livestock futures. Case in point: today’s logic-challenged divergence of December live cattle and December lean hogs.

Ignoring Wednesday’s $2-3 surge in packer spending and its discounted status to actual feedlot sales, December live cattle slipped 62 points lower. Forget about good news. Only fools buy constructive facts. And by the way, what has reality done for the market lately (you know, within the last hour or so)?

Ignoring seasonal bearishness and its premium status to the cash lean index, December lean hogs shot 105 points higher. Don’t be such a pessimist. Rumors are far sexier than facts. So what if country hogs don’t typically bottom until late November or early December?

I guess this odd action is just another warning not to buckle the harness of rationality too tightly around the market horse. That’s especially good advice if the rank steed comes from the CME stable. That wild bronco is all about the volatile stuff of anticipation and expectation.

So while live cattle anticipated a continuation of lackluster beef demand and larger late year supplies, lean hogs fantasized about what the reopening of the Chinese market could mean for U.S. pork exports and how domestic demand could recovery through 2010.

For what it’s worth, I can appreciate the cattle dread quicker than the hog hope. Beef cut-outs have once again run out of gas, and processors will no doubt close the week with worse margins than they began. Slower chain speed next week seems inevitable as packers struggle to make boxes more manageable. And a checked slaughter appetite will threaten to minimize feedlot leverage.

Conversely, this sudden excitement over the reopening of the Chinese market to U.S. pork seems pretty flimsy. I’m not even sure it’s a done deal given the careful way China’s ag minister characterized the development: “This decision was based on scientific analysis and assessment. It is my hope the U.S. side will follow the Chinese requirements to safely resume export of pork products to China.”

What exactly does he mean by “Chinese requirements?"

I remain skeptical for several reasons. First of all, the pork ban represents just the tip of the destructive iceberg complicating U.S./China relations. From poultry to tires to exchange rates, normalization of trade between the two global powers is fraught with difficult problems. My guess is that many of these pieces are tied together such that diplomats are unlikely to address them one by one.

Second, even if the ban was swept away with remarkable ease, I'm not sure that China would have a large appetite for U.S. pork anytime soon. The Chinese government significantly incentivized domestic production following last year’s bluetongue crisis. For the moment, foreign sources suggest that China has all the pork it can handle and then some.

But there I go again, asking the market to act like a bank accountant wearing both belt and suspenders. The board operates under much different rules and with data far less certain.

For more Harrington comments check out www.feelofthemarket.com.

(CZ)

© Copyright 2009 DTN. All rights reserved.