Weekly Purcell Report

by 5m Editor
3 March 2004, at 12:00am

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

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Weighted average cash hog prices on a carcass basis are holding above $60. This market is helped by the export difficulties in beef and in poultry.

The February futures closed on or near their contract highs, and the April is trying to take out the $62.40 high from October 15.

I advised placing short hedges on a rally to that high, and I would hold those positions until we see if the April can give us two consecutive closes above that old high and, even then, I would suggest just answering margin calls.

If the boost from the export markets starts to diminish as some of the beef trading connections start to get opened again, this market could hit some modest price pressures as the fall pig crop starts to come to market and daily slaughter levels increase during March and April.

I would not be short in the summer hogs. The July futures are challenging their old highs as they trade up to $64 this week, but we should see better prices later in the year as the seasonal strength in the summer months starts to heat up.

5m Editor