Weekly Purcell Report

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

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In the lean hog market, I've been recommending producers take profits on short hedges on dips by the December down in the $49-$50 range, and we've seen that across the past week.

I would continue to stay open to price risk in this market and not have short hedges in place as long as the December contract is trading below $50.

I do expect to see a rally from that level and would not be inclined to be on short hedges. I think the packing firms will be buying the hog futures on these dips to place long hedges.

If we look out, the June contract is $63-$64. I think we need to see rallies on that market before we place or replace short hedges. Any dip toward $62 will find buying.

If that does occur on the June, it ought to be seen as a chance to take profits on short hedges. I don't expect to see this market under major cyclical pressure as we move out into 2004.

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