LEAN HOGS

Lean hog futures plunged downward and touched a six year low yesterday before staging a partial recovery and closing mixed. The action regarding a possible bottom was inconclusive. Volume was moderate at 40,000 cars and open interest on the plunge increased by nearly 2,500 cars. Possible bear trap??? Certainly this market is extremely oversold. Cash hog prices were confirmed lower, mostly down $1.50. Look for more of the same today. The product, however, was not lower but indeed quoted higher. Packer processing margins improved to their best levels in months, if not years. We’ve not been on-board the huge drop in prices so we’re somewhat reluctant and tentative about jumping on the long side against such a fierce downdraft. The profitable strategy is likely to buy it and put a sell stop in place.

My thoughts on hogs is not worth much as I was friendly the market over a week ago! Still have all my longs!!!!!
Dewey