based on the Hog Cycle. The CME Lean Hog Index hit the cycle crest on 7/16/14 when it topped out at 134.17. The Hog Cycle generally runs four to seven years in length. Pork production has been very high and it became obvious that we were in the chase to find the "Trough" to this Hog Cycle. The weakness in the fall futures produced global weakness in all hog futures contracts but there was no fundamental reason for the summer futures to be beaten down so much, after all, the sows that will produce the hogs that will be marketed next July and August had not even been bred at that point.

It appeared that production this fall might really over-whelm demand and the technical/emotional burden was so great that they could not resist driving the summer futures too low. When the MMMs fell to 70.025 I started buying. I thought they might dip to 60 if things got really ugly but I was prepared to ride it out. My thinking was, if there was going to be a real train-wreck, it would be corrected if not by June expiration then surely by August. I didn't get my boat loaded quite as much as I wanted and I have had to add in an up-trending market rather than the down trending I was hoping for.

As hogs have rallied, I have been buying some dips and selling some rallies. As it turns out, I have been much to cautious but I am comfortable with the profits I have been able to generate. I am a little cautious at this price level because I realize that the "Trough" to this Hog Cycle may NOT have been posted on 9/1/18 when the CME Lean Hog Index dropped to 45.30. I think that represents the Seasonality low for this year but the Hog Cycle low may still be in front of us.

So much depends on demand. If China has an ASF problem and the trade issue gets resolved, the summer futures could soar. If there is no real ASF issue in China and producers have expanded, sometime next year there could be a terrible wash out in hog prices as the market goes looking for the "Trough".

My bias is that we have hit the "Trough" and we are beginning the chase for the next "Crest". So I am HODLing the summer futures and buying dips and selling rallies.

Best wishes