Possible bottom in lean hog futures was scored yesterday. The outside day higher close occurred on volume of nearly 54,000 with open interest rising by an impressive 5,200 cars. With the exception of the soon to expire Feb, OI was higher in every hog contract. The largest increase was in the Oct hogs, jumping by 1,700 contracts. Oct also scored an outside day higher close. Technically it takes a close well above 7800 in the June to confirm a bottom.
Cash is called steady to lower despite difficult road conditions. Producers are current, this should not develop into a long term problem. This marks the third consecutive week that slaughter has been disrupted due to winter conditions. What we’ve not seen yet is some spark in the product. Where or where is demand for pork? There’s optimism toward a trade agreement with Trump advisors stating that the President “wants a deal”. The removal of the Chinese tariff on U.S. pork would really spark the market should this occur. This week’s kill is projected to be 2.512 million, or about 5% larger than last year. Last week futures rallied sharply on Monday and then proceeded to fall apart. Will this week display a far different pattern?
Well DH we might not be Long & Wrong much longer as the worm, may be turning, it won't be too soon for me!