Hogs continues to provide opportunity with futures opening only slightly higher before surging upward today, touching limit up. Now prices of all contracts are trading freely but sharply higher. The charts are unbelievable and I’m wildly bullish. Our first upside target off the pattern is 100.50 in the June. I forget to mention in the Morning Livestock Report that Rabobank has issued a report to their clients projecting Chinese pork production to drop by 20% this year. Today we are hearing that some very large hog hedgers are being forced to cover positions as their bank line of credit is fully extended. We’re also hearing that investment money out of NY continues to pour into deferred call options. Nibble away at profits by writing deep out of the money calls is our strategy. If/when prices reach our first target we may liquidate some calls outright.

Cash is expected to be up $1.00 to $2.00. The noon quote showed the pork carcass rising $2.33. All pork cuts are taking on a firm to higher tone. The idea of cheap pork is evaporating fast. Hams are quoted at 73 cents, having rallied over 30 cents from the ten year lows established on Feb 19th. Cash prices are moving higher off 20-year lows established just four weeks ago.