Weekly Purcell Report

by 5m Editor
1 July 2004, at 12:00am

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

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With the underlying fundamentals still very strong in the meat complex and including beef if these BSE issues can get resolved, we have seen the pork sector continue to get some benefit in export trade with channels for beef in important buying countries like Japan still closed.

The July lean hog contract had registered a new contract high at $78.60 back on June 4. It traded as high as $78.67 on June 21 and was as high as $78.50 again on Monday this week. Tuesday's high was $77.65 and the close was around $77.50. Anything up in this $78.25 to $78.75 range across those highs I see as a forward pricing opportunity, and I would look to get hogs covered out through early fall and winter at the same time.

The June 25 hogs and pigs report didn't show any signs of rampart expansion, but if you look at the weight numbers, there are very good prospects that we will see some increase in slaughter hogs coming to market across the next several weeks given the concentration of the market hogs in the heavy weight categories.

I would be interested in being short in this market given these very high pricing opportunities that have been in place and continue to be in place in the hog complex.

5m Editor