Weekly Purcell Report

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

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October lean hogs completed more than a 50% correction of the price break from $71.00 on August 9 to $62.50 on August 25.

With the October market now in the $65.50 area, I would want to be short as a selective hedger in fall and winter hogs on even a modest rally. I do not see the full seasonal decline in prices that I had expected and any word that beef shipments to Japan will return will hurt the export demand for pork.

With daily slaughter levels tending to run above expectations based on the latest USDA inventory reports, I see the next move in this market to the downside. I think we should expect that the August 9 low at $62.50 could be taken out and prices dip to $60 or below as the full seasonal increase in daily slaughter levels reaches the market as we move into October and November.