J.P. Morgan is downgrading Smithfield Foods (NYSE:

) from Neutral to Overweight. The fundamentals are healthy and should remain so throughout the current fiscal year, JPM believes that higher grain costs and a potential return-to-mean in fresh pork margins are likely to render FY12 slightly less impressive. Near-term estimates are remaining constant and will adjust numbers when details emerge, changes expect to be minimal. J.P. Morgan says when in doubt, buy protein stocks when everything looks hopeless and sell when the skies are bright. A lot is going well for SFD right now as hogs are selling for record high prices and export demand is excellent. Valuation is based on a Dec. 2010 target price of $17, previously $19. It is being lowered because of uncertainty around feed costs. SFD closed Thursday at $16.93