Sharply higher open sponsored by the bullish, the very bullish weekly export report only to see prices swing to sharply lower levels only to see prices recover to unchanged into the close. So everyone lost money. Frankly, it does not get any more difficult, any more confusing than it is right now. Dec traded in nearly a 400 point range and closed down 20, Feb down 20, Apr down 35 with the summer hogs 20 to 70 lower. Friday’s kill was pegged at 483,000 with the Saturday effort estimated at 281,000. The weekly kill came in very close to early week estimates at 2.726 million pigs, up nearly 5% from last year. Packers were using the nervous market to restore lost margins. Cash was quoted down $1.00 to $3.75. The closing pork showed the cutout up .75 at $77.03. The carcass was down .49 on the week.
What to Expect?
Weekly export pork sales were huge and record large at 292,200 MT and dominated by huge buying by Mexico, China and Japan. Shipments were equally huge at 210,900 MT and dominated by the same players. HOWEVER, the FAS put out a note with the report indicating this report may include past sales and shipments not reported. The same thing happened in July of 2014. This indicates very sloppy bookwork and procedure and basically allows exporters to hide business. The uncertainty surrounding the report caused traders to turn into nervous sellers. There does appear to be efforts by multiple sources to keep the price of hogs and the price of pork as low as possible for as long as possible. Packers, definitely and obviously appear to be involved in the cover up. Hog producers, independent hog producers, deserve better. China, by the way, is putting out the story that they’ll be back to a normal production mode by the end of 2020. Evidently some people believe this. Certainly the Chinese government wants everyone to believe
These comments were sent to me by my broker. I am out of office taking a long week end visiting with my sister and enjoying doing absolutely Nothing! Last night I saw & enjoyed Herman & the Hermits, along with Mitch Ryder. Tonight I will see Ronnie Milsap.
Still have all my Long positions in ZZ, GG, &JJ's!!
If the good Lord's willing and the plane's fly I should be back in office on Tuesday. In the meantime DH I hope the market treats us better on Monday!
Dewey