LEAN HOGS

Good morning. Cash hog prices were strong yesterday and quoted mostly up $1.50. Look for a firm to higher cash tone for the remainder of this week. Weekly slaughter totals (for this week) are projected to decline to below both last week and last year. While the product remains “sloppy joe” according to the USDA report, we are hearing that pork sales for out front are strong. Futures performed strong yesterday and they settled higher to sharply higher and led upward by the April. The new high settlement for the current move in tandem with power in the bull spreads is sending a bullish signal for the cash market. It does appear that something is brewing, something bullish that has not bubbled to the surface yet. We’re bullish and holding bullish option positions in the April and June. On Tuesday we just missed getting buy orders filled to assume new spec long positions in the June hog contract. On yesterday’s strong performance we noticed that volume was decent at 39,000 (also larger than LC volume which is very rare) and that open interest was higher is every hog contract. Total OI increased by just over 2,000 cars. The summer hogs are bumping up against resistance which we fully expect to be penetrated by the end of this week.

DH, you and Dennis may be on same track expecting hogs to continue upwards. Myself, I don't know! A lot depends on the world situation and it seems to change daily, plus a lot of meat is available.

Dewey