Weekly Purcell Report

by 5m Editor
11 February 2004, at 12:00am

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

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In the pork complex, I have been suggesting we would see strength in hogs especially given the difficulties in the beef sector. The weighted average price for hogs on a carcass basis is above $60/hundred weight and is certainly making the current trading levels of the February contract look consistent.

Although I would have started pricing earlier, I said in recent newsletters that we might see a rally up to the October 15 high at $63 on that February contract.

We actually recorded a high of $63.10 on that same contract in Monday's session, and there is clearly selling pressure as producers place short hedges, those holding long hedges take profits, and speculators either take profits or sell this market in anticipation of a correction to the downside.

I would be aggressive on getting hogs priced out through the March/April time period with this February futures in the $62-$63 range, and I see this as an excellent forward pricing opportunity.

5m Editor