Weekly Purcell Report

by 5m Editor
5 May 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 lean hog market continues to look strong with July making new contract highs. The June contract has a contract high of $76.47 which occurred on April 12, and Monday's activity was within $1.00 of that contract high.

Tuesday is a down day with the June close down $1.00, but this market will try to rally again. If excellent profits are offered, producers might want to think about selling a rally toward that $76.47 high as an aggressive approach to selective hedging.

We have long term trend lines on this chart that could hook to the low at $71.65 on April 21. The more cautious producers might want to wait for a close below that uptrend line before placing short hedges.

Pork production continues to run well above year-ago levels, but prices are strong. I think again there is significant help coming from increased demand for pork in the export arena, especially in countries like Japan where beef shipments will not be allowed until probably sometime toward the end of the calendar year.

5m Editor