Weekly Purcell Report

by 5m Editor
7 January 2004, at 12:00am

US - Agricultural US Commodity Market Report by Wayne D. Purcell, Agricultural and Applied Economics, Virginia Tech.

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The December Hogs and Pigs report was negative with the totals inventory up 1 percent from last year and the breeding herd only down 1 percent.

The distant lean hog futures, such as the July reacting to the 2 percent larger fall pig crop, traded down on Friday but closed near the high and traded up on Monday.

Cash hogs are looking higher as the packer margins are encouraging slaughter, and the weather is always a small issue this time of year when storms stop movement of hogs to slaughter.

There is resistance on the February chart near $57 and again at $60 across the October-November highs. I would look at short hedges on rallies to those resistance planes expecting pork to get some continued help at retail with the uncertainty in beef.

In the more distant July contract, I would watch to see if that market can take a run up toward the highs above $62 and not be in a hurry to short hedge. I like the looks of the Friday and Monday action on that chart.

5m Editor