Re: The final Purchase Index for - - -

What to Expect?
All exchanges closed on Monday. Technically hogs appeared to turn a corner this week after the summer hogs touched their 50% retracement levels. This would put the seasonal low in about one week early. It requires a close over 8300 in the June to really trip up the aggressive sellers from the last couple of weeks.

Fundamentally U.S. pork is so cheap that is unlikely to remain at these price levels for any length of time. Hams are just above ten year low while loins are offered near 40-year lows. Low price cure low prices. This year, ASF in China will also cure low prices. Two new cases were reported today in Gansu province. This province had reported their first ever case earlier in the week. Total cases is now around 108 in 24 out of 34 provinces. Also this week we learned of a new case in Mongolia for the first time and we saw evidence out of China that producers have been aggressively liquidating breeding stock. This liquidation has created a short term glut of pork in China. Long term, massive pork deficits are projected beginning in the second half of this year.

The trade is becoming very optimistic that the U.S. and China are getting close to resolving their trade war. If and when China drops their 50% tariff on U.S. pork, prices should shoot higher and likely sharply higher. In the meantime, look for solid domestic demand coupled with increasingly aggressive export demand to support strong seasonal moves higher in cash, cutout and futures.

DH, above is what I received from my broker awhile ago. I have been Long & Wrong for this entire downtrend, hoping I will get my money back now, how long I have No idea!!

Good weekend to all as market is closed on Monday


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