Weekly Purcell Report

by 5m Editor
17 June 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 expiring June lean hog contract closed above $79 on Tuesday and is about in line with the cash market, so I see no major reason for movement in the futures from this price level.

The active July contract closed just below $76 in Tuesday's session, and I would be inclined to place or replace short hedges in these summer hogs on any rally back up toward the June 14 high on the July at $77.90 and would certainly be aggressive on any rally back toward the all-time contract high on June 4 at $78.60.

I do not see significant upside from those levels in the summer market and would look for protection out into the August as well. On the more distant hogs where we see a huge discount in the fall and winter contracts, I would not be placing short hedges at this point.

I think we will see better prices later in the year than we have been offered in the middle of June.

5m Editor