Weekly Purcell Agricultural Commodity Market Report Wayne D. Purcell Agricultural and Applied Economics Virginia Tech

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The hog market has traded off the recent highs and has completed a correction to the downside that will allow us to construct a better and more effective trend line.

Cash hogs on a carcass basis are down as much as $2 in some markets in Tuesday morning trade, but they are showing weighted average prices from Monday of $64-$65, which puts live-based prices in the highs $40s and at very profitable levels.

The summer and fall contracts have corrected to the downside recently, and we can now construct a better trend line off the April lows and the low from last Thursday, June 19.

Place hedges on rallies to the contract highs, which are just above $69 on the July lean hog contract, or on a close below these newly constructed trend lines, which I think are much more valid than the steeper trend lines that the charts would have allowed before last week.