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Weekly Purcell Report

by 5m Editor
12 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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June lean hogs are making new contract highs in Tuesday's session trading as high as $76.50 which is limit up on the day. Weighted average cash prices for hogs earlier this week were slightly above $77.

You can hook the lows on the June hog chart from February 17 to the daily low of $70 that occurred on April 22, and let this market move to the upside if it can and not do anything with short hedges until you see a close below the trend line.

We may see a parallel here, however, to what we have already seen several times this year in the grain and soybeans where being willing to sell a rally is likely to give you more attractive prices than waiting on trend line sell signals. But the other side of that issue, of course, is you can sell rallies to two or three different highs as the market continues to move up in a bullish fashion and have to buy back those short positions and try to manage this volatile marketplace.

So, backing away and letting the trend line give you direction is not an unreasonable posture in these hog markets.


5m Editor