LEAN HOGS

Hog futures rallied yesterday on the back side of a “non-bearish” hog & pig report. The report indicated breeding and conception problems last summer as the winter pig crop came in smaller than expected. The pigs per litter, at 10.30, was actually down 2% from the Sep-Nov quarter. This is very rare and has not happened since the PED crisis period in 2014. While production will remain record large the expansion is very cautious. The perception is that supply will not be enough to turn hog prices into a down trend as demand is improving. We need to see a close over 7010 in the April which can only be fueled by a sharp move higher in the pork cutout resulting in a sharp rally in the cash. Look for both the summer hogs and the fall contracts to post fresh contract highs in the days ahead. Yesterday’s futures rally occurred on decent volume with open interest rising by 2,900 cars.

I am not in market at the moment, however I will be before day is over. I have orders in to buy or sell, all within trading range. I don't have a bias either way!
Dewey