Weekly Purcell Report

US - Agricultural US Commodity Market Report by Wayne D. Purcell, Agricultural and Applied Economics, Virginia Tech.
calendar icon 26 February 2003
clock icon 2 minute read

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Cash hog prices are actually moving down a bit with the weighted average prices on a carcass basis for the direct trade at $45 and below. That is reflecting a tendency for daily slaughter levels to start increasing as we move toward March and on into April and the fall pig crop reaches slaughter weights.

In the lean hog market, this April contract has backed off from late 2002 levels up above $60 to prices recently that were below $52.

We may be building a bear flag on this chart, and I suspect we will see a test of the lows from last October down around $50.

We can construct downtrend lines on this chart without any trouble at all by hooking the highs from about January 10 to the late January high. That trend line is still above the market, and we have not seen a buy signal yet.

I would hold short hedges until we see a buy signal with a close above that trend line or we see a drop to the support that I see on the chart at about $50, whichever comes first.

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