Weekly Purcell Report

US - Agricultural US Commodity Market Report by Wayne D. Purcell, Agricultural and Applied Economics, Virginia Tech.
calendar icon 8 December 2004
clock icon 3 minute read


The pork sector continues to ride high on the strength of a huge increase in demand in the world market and especially in Japan where beef shipments are still banned. Weighted average lean hog prices in the national market this week have been as high as $79.

The February lean hog futures have not been that high, running into resistance and selling about the first of December around $77.70 and that market is down around $1.00 in Tuesday trade with a daily low of $72.25. Clearly, the futures market is anticipating an end to the demand surge coming from Japanese buying when the beef channels are eventually open again.

But I am not sure that will get done by February and would expect to see this market rally again. When this down correction runs its course, we will be able to draw resistance across the contract high near $77.70 and a trend line hooking the low at $64.15 on October 27 and the low at the end of this correction which is likely to happen this week or next.

Let's watch for that chart opportunity and then be ready to sell on a rally back to the highs or on a close below the trend line, just the reverse of what we are looking to do on the feeder cattle contract discussed above.


© 2000 - 2025 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.