LEAN HOGS

Cash hog prices were once again lower on Wednesday, quoted down $1.00 to $1.50. Large production continues to weigh on the market in tandem with the negative aspect of the WHO report. This report encouraged the pork buyers to step out of the market, allowing what was a well-balanced product market before the report to become totally unbalanced. The value of the pork carcass has declined over $8.00 since WHO was released. Large production is bringing new sellers to the board. We estimate that about 10,000 new short positions have been established at contract lows. This is a bear trap that is now fully loaded….in our opinion. Production is slated to taper off by the end of this year. Pork is cheap and in a prime position to steal market share of the consumer meat dollar from both Turkey and Beef. Repeating, we are not bearish at a six year low in hog futures.

My fingers are getting sore from being crossed so much! I thought his thinking on new shorts is interesting.
Dewey