Weekly Purcell Report

US - Agricultural US Commodity Market Report by Wayne D. Purcell, Agricultural and Applied Economics, Virginia Tech.
calendar icon 30 April 2003
clock icon 3 minute read

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There is talk about short covering in both the cattle and hog pits in Tuesday's session. Hogs have not pushed out above recent highs yet, but the feeder cattle futures have.

The supply-side numbers in the hog complex continue to run about 3 percent below last year's levels, and we are seeing new contract highs recorded in anything beyond the August lean hog futures.

The nearby May contract has resistance across late January and early February highs around $60, and we see that same resistance on the June contract just above the $63 level.

June is still well below its contract high, which is up around $67, and I would certainly be an aggressive seller on these late spring and early summer hog futures contracts if June can challenge its contract high in the $66-$67 range. That is not likely to happen in the very immediate future, but if we see continued strength in the cattle complex, that is going to help in pork as well.

Keep in mind that the weighted average price of these hogs on a carcass basis that I have been talking about for weeks that had been languishing in the $45-$47 range is now above $52 in afternoon trade on Tuesday.

The Monday afternoon average was $52.94, so we are clearly seeing some strength in this complex.

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