Weekly Purcell Report

by 5m Editor
17 November 2004, at 12:00am

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

Cash hog prices are back in the high $70's, continuing testimony to the importance of robust export shipments and to strong domestic demand. The season has not been normal at all for hogs with the expected 4th quarter price swoon completely missing this year.

Feeder cattle futures are not as strong as live cattle or lean hogs but I expected that as the cattle coming out of the feedlots continue to show losses and take equity out of the feedlot complex.

The hog market continues to surprise me with its upside ability. December lean hog futures are back above $75 and the distant hog futures such as the July are well above $70 and moving higher.

It is a matter of watching chart patterns here for some signs of topping and replacing short hedges at levels that make the profits too good to pass.

Keep in mind that when the beef to Japan thing finally gets cleared up, that will take some of the wind out of the sails in this recurring bull market in hogs.

5m Editor