Continued labor problems remain in force along the west coast with some work stoppages noted over the weekend. This labor dispute needs to be solved for meat exports to have a chance to get back on track. Hogs
went limit up on Friday but look for a severe pullback today. Simply put, there's no change in the bearish fundamentals. Aggressive expansion is now resulting in larger production and at the same time, despite lower prices, pork demand is struggling. This is not a good combination. Part of the problem has been sharply lower exports to China. The industry was counting on expanding trade with China when producers started expanding herd size. Chinese exports during January were reported over the weekend down 3%. Shrinking demand in
China is a major problem for hog prices moving forward. On a test of the lows we'll be looking at maybe buying some April calls. We're also working orders to liquidate profitable bear spreads. I'm not interested in trading futures from the long side, however.