Weekly Purcell Report

by 5m Editor
13 October 2004, at 12:00am

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

December lean hogs traded as low as $65.10 last week, well off the September 24 high at $71.80, and tried to rally in early-week trade.

But Tuesday's close was down the daily limit of $2.00 with the daily average cash hog price in the national direct market back below $70 again in the face of expectations for continued seasonally high daily slaughter levels.

Hold short hedges since this looks like more than a correction of the last price rally. There is support on the December across the lows near $62 in September plus what I see as major support across the low at $60.40 from August 25.

Don't be surprised if the market challenges one or both of these support planes. It has been strength from export demand that has held this market up in the face of increasing slaughter levels and that one component of demand may not be enough as we move toward November which is usually the month with the biggest daily slaughter levels of the year.

5m Editor