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

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It looks as if Monday's action on the lean hog futures showed us buying support and perhaps moved this market to a position that it can rally again.

Aggressive selective hedgers might want to look at buying back short hedges as this market starts to rally. But we are not that far off the highs, so one needs to be careful.

Monday's low gives us a chance to draw a very legitimate trend line on the hog charts, and I suspect with demand continuing to be in good shape (especially in the export arena), we may be getting ready for this market to try to challenge its highs again.

If we do get the rally to the high, keep in mind the contract high from April 12 on the June contract is at $76.47. Again, we can sketch a resistance plane across that high and put a trend line under this market and either sell a rally up against the high or wait and let the market tell us by its closing actions which way it will move out of this triangle.