I received this from my broker awhile ago and thought I would share
What to Expect?
Mixed signals continue to flow out of China. Now it’s reported that their imports during June were down 17% due to the low pork prices. Overall U.S. pork exports were strong in May. Reports suggest that strong activity remains in place today. Supply wise it’s difficult to imagine a much more bullish scenario. This week’s kill will come in at around 2.3 million. Weight data comes out in the AM, they’ll likely be down again. Hams are back to 90 cents. Bellies are not cheap. Retail items are cheap. Labor remains a problem at the packing plants. One spin off is the fact that pork trim remains sky high. Packers are forced to slow the chain speed by law. This will cause problems in the fall/winter unless numbers really drop off, which they might due to PRRS. CA prop 12 is a looming debacle in which no one seems to have a solution. ASF is spreading around the world which continues to be a scary thought. The seasonal tendencies suggest to sell…sell…sell. The discounted board, is signaling to sell. We will hedge. Today’s action was bullish enough to keep us watching for another couple of sessions. Look for specific hedging strategies in tomorrow’s wire. Partial hedges is all that we’ll advise and hope the long term bullish fundamentals prove the discounted board incorrect. The USDA is finally smelling the roses, lowering production for next year. Wow, they’re slow. The long-term fundamentals are bullish if we solve the two headwinds mentioned above.
LOOK FOR SPECIFIC HEDGING STRATEGIES IN TOMORROW’S WIRE.