MURICO.com Forum

Hogs

What to Expect?
There’s very little good news to report in the hog market and pork sector at this moment. The weekly kill is going to jump from last week and is currently projected at 2.210 million pigs, up 42,000 from last week’s harvest. The bump up in production should keep the cutout at bay. Packers have successfully restored lost margins mostly through weakness in cash bids. Stability (in the cash) is possible ahead of the hog & pig report that is scheduled for Thursday afternoon. The report should confirm expansion and point to another year of record large production. If exports are going to slow, we’re in for trouble and that appears to be exactly what’s happening. Short term the July hogs look undervalued. If this is correct, at some point Aug should find traction and rally. This should provide a sell opportunity, eventually in the Aug hogs. The fall and winter contracts may only display a shallow recovery off the lows. Once the seasonal high timing is reached, sharply lower prices down the road should be expected.

The comments above were received by me this afternoon. I am trying to reduce my positions ahead of the pig report. I am still short in Aug & Oct. By closing Dec & July I reduced all positions by over a third!

We will see what tomorrow brings, today was a good day!

Dewey