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Hogs by Dennis Smith

Cash hogs continue to climb the wall of supply as packer margins are now starting to narrow rather significantly. Yesterday the cash was quoted on the late wire $1.50 higher. Early calls for today are higher. The kill was large, reaching a new daily high at 464,000. The two new hog plants continue to slowly ramp up production. Adding two new players has actually spurred competition. This is something we knew in theory should occur but we werent sure it would actually would happen. It has. Assuming firm bids into tomorrow cash will be higher for three consecutive weeks. The hard part, now, is determining whats next in hog prices, futures and cutout? Honestly, we dont even have a strong opinion.. Record high production at this time of year normally results in lower cash, sinking cutout and lower trending futures. Were not sure that normal is something that applies to the markets any longer. Weekly pork export sales were awful, down 51% from the 4-week average. Shipments were unchanged. Sales were half that of shipments which is not a good trend when processing 2.5 million pigs per week. Theres nothing to conclude from volume and open interest. Look for a test of resistance early. I define resistance in the Dec hogs as the range from 6400-6450.

Like me if you are confused about hogs, I believe Dennis is also!! The part about this trade was "I was so sure of it". That seems to get me in trouble a lot! I am still very short in hogs!

Dewey

Messages In This Thread

Hogs by Dennis Smith
Re: Dewey, that's double true-----
Re: Dewey, that's double true-----