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

Weighted average cash prices for hogs are still above $76, offering huge profits in hogs as corn costs moderate and come down. Helped by export demand while beef is blocked to major buyers like Japan, any progress on re-opening channels for beef to Japan will hurt hogs.

We saw trend line sell signals on the October in the mid-$60s back in July, but the market recovered and made new highs as the export and domestic demand stayed strong. You can sketch a major trend line from the February lows near $50 on the October across the mid July lows that dipped below $64.

The bull-market run in hogs is likely over when we see a close below that trend line later in the summer or early fall. Eventually, we will see expansion in this complex and the late September quarterly Hogs and Pigs report will be closely watched for signals on what will be happening out into 2005.

There is not likely to be any huge break in the 2004 market, however, simply because we cannot change the number of hogs coming to market that fast. The strong profits are destined to be around through the end of the year in all probability.