The sharp rally in hog futures yesterday, while impressive, occurred on light volume of only 48,400 contracts with open interest losing nearly 2,000. So open interest nearly lost what it gained in the previous session. Three items inspired the large buying spree yesterday, none of which will alter the near term fundamentals of large fall pig runs just around the corner, record large production and a pork packer that continues to greedily buy hogs at lower prices. The China/U.S. trade talks, scheduled for later in August, will no doubt be very slow going and likely drag on for months. The ASF situation in China, while very serious, is a potential long term bullish fundamental and will having no bearing on supply/demand issues facing the market in the next sixty to ninety days. The NAFTA talks are the potentially most bullish fundamental development of the three. Trump stated in a cabinet meeting yesterday he was in no hurry and for trade negotiators to “take their time” and “if we don’t have a breakthrough, don’t do the deal”. Cash is called lower into next week. With Oct premium to the index, I doubt the board can sustain the current move upward. We saw over 16,000 puts trade yesterday compared to 10,000 calls.

Here are some stats & thoughts that might help someone today. I have been selling more Oct & Dec this morning. I still have 2 more orders in but doubt they will get filled.

Dewey