What we know for sure is that yesterdays surge higher in lean hog futures was a light volume rally posted at just 27,335 with open interest slightly lower. We also know from the COT report released yesterday that funds appear to be in liquidation mode not only in lean hogs but in live cattle and in the grains as well. Considering their net long in hogs remains above 50,000 contracts, liquidation mode is a negative development. Last week there were three downward revisions in hog slaughter. Weights, reported last Wednesday, are up four pounds from last year. Packers appears to be keeping the kills down in an effort to maximize their margins. This is a negative long term development. Finally, the seasonal tendencies suggest hogs will top by the end of this week. We are trading accordingly. Look for resistance today just above the market in the most active Feb from 7030 to 7070. Dec hogs are now premium to the CME lean hog index putting the onus on the bullish trader to keep this market moving higher. Cash is expected to trade weak to lower today

I started a short position last week and have been adding to it, sold 5 Feb at 70.25 this morning and have more orders working. avg price 69.91 on lot.

Dewey