Lean hog futures have surged higher in the early electronic action today. Front month April is now poised to test important resistance defined as 6600. I'm not sure who/what the buying enthusiasm is based on. Cash
hog prices appear to have bottomed for a minute. Given talk that slaughter is going to be up 5% to as much as 7% this week, it leads me to believe that we're going to experience a drop off in butcher hog numbers in the weeks ahead. Product has stabilized but it's not exactly powerful strong. Regardless, we're pleased to see the action and we'll be looking to liquidate our April 74 calls at a profit (paid 100) and next we'll be looking to get short in April, Oct and Dec futures. Option trade in hogs was active yesterday with open interest in April calls surging higher by 1,407. The action was focused in the 67 and 68 call strike prices. Dec call open interest increased by over 500 which we believe was hedging with producers buying Dec puts and selling Dec calls. Dec
puts also increased in OI by 356. There was some active put buying noted in the Oct 60 and 62 strike prices yesterday with OI here increasing by 304. I need to see a close well above 6600 in April hogs to give the chart the look of a seasonal low. I have no fresh news or updates on the ongoing labor dispute at the west coast ports.

DH, I am sure you are busy this morning so I posted Dennis's comments! I have sols some JJJ's, MMM's, & NNN's this morning. Have orders in to sell more if they want to go L/U! It is interesting how these hogs can do the unexpected at any time.

Dewey