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

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Not surprisingly, the lean hogs get caught on the other side of the Canadian border reopening issue.

Pork and hogs had been helped with the strength that we were seeing in the beef market and in cattle, and when it appears that cattle will start moving across the border again, the somewhat bullish bubble we had seen in the lean hog contracts across the past two weeks was deflated.

Looking at the October lean hog contract, the high that was recorded last week at $54.65 on Friday was more than a 38 percent correction of the last break we have seen in this market, and Monday's prices held that fairly well, but we see significantly lower prices in Tuesday's session.

I would hope that some short hedges got placed or replaced on this corrective rally, and sometimes calculating the 38 percent, 50 percent and 62 percent rallies are the best move you can make when there is no obvious resistance plane on the chart.

I suspect now we are destined to see a retest of the lows, which are down toward $50.75 on the October, before this market tries to rally again.

Seasonally speaking, we are now likely to see increased slaughter levels on a daily basis as we move through August and into the heaviest daily slaughter levels of the year which usually occur during October and November.