LEAN HOGS

Weekly pork export sales were down 12% from their 4-week average. It was noticeable that the Chinese were not buyers of U.S. pork last week. Export shipments were better, up 4% from their 4-week average with the Chinese the third largest recipient of U.S. pork. Cash hog prices were higher yesterday with the pork slightly lower. Hams are in good shape with bellies also firm. Trimmings appear to have topped with loins somewhat burdensome. The sleeping giant is awake as we predicted would be the case four weeks ago. We’re out of all bullish positions and ready to begin executing hedging strategies in earnest. Open interest increased slightly from yesterday’s topping action. Open interest has been pouring into the hog market of recent. Volume in lean hog puts, for the second consecutive session was active with OI in July and Aug put surging. We’re guessing and hoping this is producer hedging, locking in attractive prices for summer production. Despite being bullish, we’re a bit disappointed with the lack of surge in the cash and lack of zip in the product arena.

I am still loaded for Bear!
Dewey