Cut right to the chase today. Mexico is slapping a 20% tariff on U.S. pig feet and shoulders. These cuts are unpopular in the U.S. but very popular in the Mexican market. Pig feet make up 2% of the carcass. Butts and picnics, the shoulder cuts, make up a combined 21% of the carcass. This is not good news but the market knew that some kind of retaliatory measure was going to be announced. So the surprise factor is minimal and the tariff does not include hams, loins or bellies which make up a combined 66% of the carcass. Again, this is not good news but its also not a surprise to the futures market. Mexico is the largest buyer of U.S. hams. Hopefully rising cash and appreciating cutout value will override this news today? Cash is called higher as were entering the tight butcher hog supply situation of the entire year in the next few weeks. The dilemma is that packers are scaling back hours which will tend to stifle the rise in cash hog prices. The only thing to change this would be a sharp, very sharp rise in the carcass. Yet were seeing tariffs slapped on our product. Not a good situation. Hedging on any type of rally is highly appropriate in my opinion.

I haven't posted for a few days as I have been very busy, in addition to getting a lot of trading done. Just got out of my last shorts this morning but have all kinds of orders in for new positions! I was doing so bad for awhile I didn't want anyone to be misled by me!!

Dewey