Weekly Purcell Report

by 5m Editor
18 August 2004, at 12:00am

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

Cash hog prices are starting to drift lower with weighted average prices in the $73-74 area, off as much as $5.00 across the past few weeks.

Daily slaughter levels are usually highest in October and November on a seasonal basis and even a modest increase from current levels will pressure prices and the futures are starting to register that fact.

Monday closes on the October and December lean hogs were down over $1.00 and both contracts showed sell signals with closes below trend lines.

Tuesday's price declines are over $1.00 on the October as the breaks of trend lines brings selling pressure. If the hogs were not already forward priced, they should have been priced on Monday.

For producers who are late in seeing the chart action, look for a really back up toward $66 which is Monday's high and also the bottom of a small chart gap on the October contact.

The Tuesday closes well off the lows suggest we might see a rally across the next several days.

5m Editor