Something unusual is that the Commercials have flipped to a net long position. It was first reported last week in COT positions as of 11/17, report published on 11/20. Today we find out that commercials added size, with positions reported as of 11/24. Report was published late due to Thanksgiving holiday. Interesting that first reported long on 11/17 was the day of the ZZZ low at 51.80!

Commercials were net long only 5 occasions since 2009. Each time there has been a $10+ rally. I’m thinking some of those rallys were ITZ $10 hog ADDICTION moves! During these 5 occasions, commercials stayed net long approximately 3-6 weeks and then reverted to their normal short position. Commercials includes processors, producers as well as swap dealers. Evidently they see value in the 50’s.

Attached weekly chart has a white vertical arrow on the 5 times (bottom graph labeled COT indicator). The weekly chart at top is continuous contract data so the past prices don’t fit with actual prices that you might have traded. At bottom, the yellow histogram is the commercial pctg of total open interest. Commercials are normally short (below zero) and it seems note-worthy when they pop above the zero line. Small specs are net short right now AGAINST the commercials and funds.

Something else unusual is that the other 5 occasions for commercial long happened in late-spring or summer.

Hogs never make it easy, so the difficult question is ... we’ve travelled $7 up from the low already … have we exhausted the firepower from commercial buying? Past history has been that MORE rally is ahead.

Finally – a personal story. Our local grocery chain, HyVee, did a special prior to Thanksgiving where the consumer bot a turkey and HyVee GAVE THEM a ham. I was amazed at that special. We’re moving tons of pork thru the channels with specials like this!!