Monday saw an impressive rally in hog futures on volume of trade reported at 52,300 with open interest rising by over 3,500 cars. This surge in OI on the rise in prices confirms the bullish nature of the rally and tends to suggest it will hold. We’ve certainly been bullish and expecting a strong expiration in the Aug contract. Packers were successful in their effort to throttle the cash market with prices quoted down $1.00 on the late report. So the latest index at 8610 compares with Aug futures which settled at 8340. These will converge on Monday. We’re long a host of calls most of which are the 86 calls but we also own some 82 and 84 call strike prices. We did not/have not moved into speculative long positions in the Oct but we did manage to lighten up on profitable short hedges before the market turned strong. The direction of the cutout was higher, quoted up $1.79 last night. The weekly kill is projected to be slightly larger this week but we’re also hearing there’s not enough pigs to get the kill this high. Look for a fully steady to higher open and most likely a higher close today.

Looks like I am opposite of Dennis's suggestions! Sold some more at 68.80 this morning.

Dewey