is just ready to begin, so don't get cold feet now. I should say the fun for traders but misery and despair for the producer. I was thinking a $5 bounce was possible but now I expect $3 bounces to bring in new selling. This is based on what I've heard from producers the last 3 days. Those that failed to listen to my warnings are now telling me to sell as soon as there is a $5 rally. That was only possible before we knew what the report would say. That $5 rally is not likely to happen until the low is in-----and then that $5 rally will quickly turn into a $10 rally. That's usually how the Psych Game is played by the Big Money.

The report numbers were what I was expecting and they are definitely setting a path towards 1998 UGLY which I have also been expecting. This has played out a lots quicker than I was expecting or I would be sitting on more than 2 short Dec. I was looking for a bounce back to my sell order at 48.00 yesterday but the last 30 min of trade the hallucinations for the extension lower was too much to ignore so I put on my 2nd short @ 47.00 and prepared my fishing lines for today. A lucky guess but it was based on my conviction that my 35.00-38.00 target would eventually happen.

Many look at the 3% higher figure for market hogs and believe that is not that big to justify 98 UGLY. Think it through, I told one producer------in 2007 the Sept report showed 55.8 million head of market hogs and we now have 64.8 million head of market hogs. That's 9 million more hogs and the freezers are full. His response-----"that's no reason to get 98 UGLY". I told him to do the math for how much he's losing if he's selling hogs for 38.00. No response.

When you look at the 1998 numbers showing 56.0 million head of market hogs that were being marketed 30-40 lbs. lighter than todays 280-290 pounders with the cheap corn the additional 8 million hogs that are 40 lbs. heavier than in 98, the freezers are full, world pork production is high, the meat sector as a whole is overflowing---------to say the least, demand is not likely to be in a hurry to buy until that production starts to back off. My 35-38 target could be too high but is still low enough to make the producers Bank Account go to "1998 UGLY".

I've been waiting 9 years for this and I'm going to enjoy the opportunity. I was warning all of the producers I knew even those that weren't connected with me. I even spent many hours twisting arms for hedges when price was 10 and 20 dollars higher. Less than 50% took my advice with small % of production. Only 10% were serious enough to go 50% of Oct and then with $12-$14 profit we rolled out into Dec and have 90% of production hedged between 53.50-58.00. We were also forced this week to go 50% on Feb when it broke below 52.00. They will survive this UGLY spell.