Weekly Purcell Report

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

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

The national direct hog market dipped below $70 on Monday on a weighted average and carcass basis and then dipped below the $69 level on Tuesday morning.

This is the seasonal decline that is always there and the important question is whether the October futures, trading around $66 on Tuesday, will be where the cash prices will stop their declines or whether the cash market will move still lower and force the futures lower.

I am not sure of the answer to that question and would hold short hedges in the lean hog futures. If you are concerned that prices will move lower and have no short hedge protection, use a rally back up toward the $67 level on the October as a signal to hedge October, November and December hogs.

5m Editor