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

August lean hog futures spent nearly 2 months in a trading range from $75 to $78 but started to give that up late last week.

The modest recoveries in early week trade this week do not hide the fact that we have tops in place and that we have likely seen all the premiums the summer price rally can generate. live base prices that had been up around $60 on a weighted average basis a week ago are $2 to $3 off that level and we see comparable declines in the carcass cutout values.

I would want to be on short hedges here as we move into and through August and start into the fall months where the decline from the summer price peaks is typically over 10%.

Keep in mind that when the export channels for beef to Japan get opened again later this year (likely, not guaranteed) there will be a concurrent decrease in demand for pork in the world market and we could see lower prices.