February 2009 Archive for The Lean Hog Perspective

CORN - May '09 Electronic
Open - $3.71 1/4, High - $3.80 1/2, Low - $3.65 3/4 Close - $3.70 1/2 Down $.01 3/4
As a review from yesterday I said "I am looking for a retracement lower tomorrow with a test of the $3.68 1/2 to $3.66 area.  The daily chart looks somewhat impressive after today's activity so if we do not retrace tomorrow and close firmer again I think we may be starting a leg higher in the market.  I think we will make an early high and late low tonight.  Support will be $3.68 1/2 to $3.66 and resistance will be $3.77 3/4 and then $3.80 however I am not confident that we will get that high."

May '09 corn hit both ends of my range from yesterday, the high was $3.80 1/2 just a 1/2 higher than my number and the low was $3.65 3/4 only a 1/4 below my number.  I sold out of some long positions at $3.76 which were put on the other day at $3.59 1/2.  I am now back down to around 25% of feed corn covered and I look to re-establish my coverage around $3.60 if we can get that low.  If May '09 closes above today's high of $3.80 1/2 then I may change my mind but for now I am going to make the market prove itself to me.

Bottom line - I expect the May '09 contract to open slightly higher tonight and find early resistance.  I think we have another shot at testing today's low either tonight or tomorrow.  Sustained trade below $3.70 tonight/tomorrow will trigger a target of $3.59 1/4.  Support will be $3.65 3/4 and then $3.59 1/4 and resistance will be $3.73 to $3.75 and then ultimately $3.80 1/2.  I am expecting another day of weak trade tomorrow however I am still not bearish longer-term. 

MEAL - May '09 Electronic
Open - $267.40, High - $270.50, Low - $259.70, Close - $263.20 Down $4.20
As a review from yesterday I said "I have a cycle low in place for tomorrow and also a longer-term buy signal at $266.60 on a stop order if the market moves below today's low and turns around and moves higher from there.  The protective risk management sell stop would be $1.00 below the most recent low. I am looking for the early low and late high today which didn't happen so I am carrying that thought over into tomorrow.  Support will be $265.90 then $265.30 and resistance will be $271.60 to $272.90."  

As mentioned above, we will have a longer-term buy signal ON A STOP at $266.60 if and only if the market makes its way back up to these levels.  The intraday chart suggests we have a chance to make this signal during tomorrow's trade.  The evening trade has the market making another dip lower before we take a stab higher.  

Bottom line - I believe support will be at $259.70 with a good chance of touching this level and resistance will be $265.10 to $266.40 but if the aforementioned signal is good then we could see a challenge of today's high of $270.50.  I was expecting an early low and late high today which we didn't get but the third time is a charm right?  My expectation is for an early low and late high tomorrow (I know if you say it long enough it will happen eventually but that isn't my intent) although the meal market has been challenging me this week.  I still own my $280.00 April call options and have the downside open, if the market drops enough I will roll my options down to a lower strike price.

HOGS - April '09 GLOBEX
Open - $59.35, High - $59.50, Low - $58.60, Close - $58.975 Down $.125
Reviewing yesterday's comments I said "cash was weaker again today with a lot of packers bought up into next week.  The cutout was up $.41 today and cash was lower again so that means the packers gained more of their profit margin back today.  I am expecting follow through on this rally into tomorrow on the coattails of higher product tonight.  I think we can see the April '09 contract reach $60.425 tomorrow if the follow through is of the force I think it could be.  I look for the hog market to firm as the day moves forward tomorrow.  Support will be $58.75 to $58.50 and resistance will be $59.60 to $60.425 of which I think we could touch."

Reviewing my comments I guess I should have gone with my first level of resistance at $59.60 considering the high today was $59.50.  I was in range on the support side of the equation but not accurate in thinking we would firm as the day moved forward.  I think today was just a corrective/slow down day because it didn't do anything damaging to the charts.  We will need to close below $58.05 in the April or $70.52 in the June contract.  There are levels of support slightly above the respective numbers but these are my line in the sand values.

Bottom line - I am looking for April to continue lower tonight and make and early low and possibly test $58.35 but the market had a hard time moving lower today.  I am still on board with higher hog prices to come and I would like to see us close at $59.00 or higher tomorrow for a continued setup on the weekly chart.  Support tomorrow is $58.32 to $58.05 for April and $70.80 to $70.53 in June.  Resistance for April '09 is $59.15 to $59.50 and then up to $61.00 although it is unlikely to happen.  Resistance for the June '09 contract is $71.60 to $72.00 and then all the way up to $73.50 which is unlikely tomorrow.

NW_LS500
Des Moines, IA     Thu, Feb 26, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Wednesday's Close:      Fresh loins generally steady;
butts steady to 1.00 lower; sknd hams 17-23 lbs not tested, 23-27 lbs weak in
a light test; sdls bellies 14-16 lbs steady; lean trimmings not tested. Trading
slow to moderate, with light to moderate demand and mostly moderate offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :              86.5
Loads TRIM/PROCESS PORK  :               3.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/26        89.5      56.57   71.97   60.91  40.06  97.15 40.65  71.26
Change :                0.14    1.50    0.72  -0.53   0.44 -0.61    unc
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Thu, Feb 26, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :   .10 lwr   :   .63 hgr   :   .49 hgr   :  1.12 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 44.50-54.05 : 47.00-54.05 : 47.00-54.05 : 44.50-54.00
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    52.14    :    52.70    :    52.77    :    51.05
--------------------------------------------------------------------------
Head Count      :   20,873    :   10,336    :   13,206    :    7,667
==========================================================================

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.

CORN - May '09 Electronic
Open - $3.63, High - $3.77 3/4, Low - $3.59 1/4 Close - $3.63 Up $.09 1/4
As a review from yesterday I said "Resistance is $3.62 3/4 and then $3.68 1/2 which I think we will touch. Support is $3.61 1/4 to $3.59 1/2, we may touch $3.61 1/4 but assuming no surprises from the President tonight I think the first support level will hold. I believe corn is searching for a bottom and I am taking a more aggressive approach to protecting upside price risk on feed needs. We still need to get back above $3.63 1/4 and close there on a Friday if we want to show further signs of a bottom."

I was 1/4 cent off on the lowest level of support I projected and the market did bounce from those levels.  I also had upside targets of $3.68 1/2 that didn't hold and we moved through them by $.09.  The close today was better than I thought it would be, we closed above $3.71 3/4 which is the 50% retracement level back to the $3.93 high we made on Feb 9th, 2009.  The intraday charts suggest a steady to lower opening for tonight and for tomorrow to be a give back day.  

Bottom line - I am looking for a retracement lower tomorrow with a test of the $3.68 1/2 to $3.66 area.  The daily chart looks somewhat impressive after today's activity so if we do not retrace tomorrow and close firmer again I think we may be starting a leg higher in the market.  I think we will make an early high and late low tonight.  Support will be $3.68 1/2 to $3.66 and resistance will be $3.77 3/4 and then $3.80 however I am not confident that we will get that high.  

MEAL - May '09 Electronic
Open - $275.10, High - $277.30, Low - $265.90, Close - $267.40 Down $7.60
As a review from yesterday I said "There is one thing I don't like on the hourly chart (very short-term) is if we gap higher tonight and retreat there is a small sell signal at $274.50 on a sell stop with the risk management buy stop above the most recent high. I WILL NOT take this trade tonight because of all the other longer-term indications I get of a potential bottom."  Even though it looks as if the signal was right it was voided because it was conditional to the first two hours of trade and we wouldn't have reached the sell stop during the first hours so it was no good.  

I am surprised the soybean and meal market failed to get anything going to the upside today and the last hour of trade is really confusing.  It looks like the overnight session should be weaker based on my cycle projections but we had an hourly buy signal at $266.80 and if it is good the market should be up right away tonight.  I don't like the way we traded today but I am still in the camp of the market looking for a bottom in here.  

Bottom line - I have a cycle low in place for tomorrow and also a longer-term buy signal at $266.60 on a stop order if the market moves below today's low and turns around and moves higher from there.  The protective risk management sell stop would be $1.00 below the most recent low. I am looking for the early low and late high today which didn't happen so I am carrying that thought over into tomorrow.  Support will be $265.90 then $265.30 and resistance will be $271.60 to $272.90.

HOGS - April '09 GLOBEX
Open - $57.60, High - $59.325, Low - $57.025, Close - $59.10 Up $1.40
As a review from yesterday I said "April '09 hogs actually had good price action today if you are looking for signs of a potential reversal in the market. I have a cycle indicator that says yesterday we were near the bottom of the cycle and today's price action confirms that to me BUT I need to see good buying above today's high of $57.95 and a close above this level tomorrow. A close tomorrow above $70.425 in the June '09 contract would also be beneficial for the prospect of a rally in that contract."

It is evident by today's close the April '09 hogs did get some short-covering and buying come in above $57.95 as mentioned yesterday.  I myself bought April '09 futures at $58.075 to hedge my $59.00 put options to protect the equity in them and give me time to see if this rally if for real before I exit puts.  With today's close as strong as it was I expect a better opening tonight and further follow through to the upside tomorrow with our next target at $59.60 but ultimately $60.425 is where I think we could be headed.  If we can reach $60.425 and close above it for a day or two then we can talk prices of $61.275 to $64.00 but let's not count our chickens yet. 

Bottom line - cash was weaker again today with a lot of packers bought up into next week.  The cutout was up $.41 today and cash was lower again so that means the packers gained more of their profit margin back today.  I am expecting follow through on this rally into tomorrow on the coattails of higher product tonight.  I think we  can see the April '09 contract reach $60.425 tomorrow if the follow through is of the force I think it could be.  I look for the hog market to firm as the day moves forward tomorrow.  Support will be $58.75 to $58.50 and resistance will be $59.60 to $60.425 of which I think we could touch.

NW_LS500
Des Moines, IA     Wed, Feb 25, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Tuesday's Close:        Fresh bone-in loins and butts
generally steady; sknd hams 20-23 lbs steady, 23-27 lbs steady to 2.00 higher;
sdls bellies and lean trimmings not tested. Trading slow to moderate, with
mostly light to moderate demand and mostly moderate offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :            103.88
Loads TRIM/PROCESS PORK  :               2.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/25       105.9      56.43   70.47   60.20  40.59  96.72 41.26  71.26
Change :                0.41   -0.56    0.09   4.19  -1.43  0.60  -0.01
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Wed, Feb 25, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :   .97 lwr   :  1.22 lwr   :  1.13 lwr   :   .73 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 44.50-54.50 : 46.50-54.39 : 44.50-54.39 : 45.00-54.50
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    52.23    :    51.98    :    52.24    :    52.19
--------------------------------------------------------------------------
Head Count      :   19,432    :    8,112    :   11,565    :    7,717
==========================================================================

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.

CORN - May '09 Electronic
Open - $3.59 1/2, High - $3.63 1/4, Low - $3.54, Close - $3.63 Up $.02 1/4

First things first, if you will notice I shifted from March '09 corn to the May '09 contract. I said yesterday I thought we would see some support at $3.48 3/4 and if we violated that for a few hours then we could test yesterday's low of $3.42 but we only got as low as $3.45 1/4 before finding support. I also said I needed to see a close above $3.52 before I got excited about the market; we got that close today at $3.54 1/4.

I am still not super excited but I did add to my long feed position today buying the May '09 futures around $3.59 1/2, this was on 50% of what our needs are. I also have $3.50 May puts in place against my long futures in case I am wrong about the market. I purchased futures and puts instead of a call because if the market rallies like I think it could I can sell my put options and salvage some cost but if I had a call option in place I would have to pay the entire premium amount to keep my upside open.

Bottom line - Again I am switching to commentary about the May '09 contract instead of March. I am going with a firmer bias for tonight and tomorrow for various reasons, 1.) we closed above $3.61 1/4 which now projects $3.68 1/2 as a target and 2.) the stock market made most of its significant rally after the corn market was closed. As mentioned I think we will be firmer tonight/tomorrow unless President Obama says something the market doesn't like in his State of the "Economy" Address this evening. Resistance is $3.62 3/4 and then $3.68 1/2 which I think we will touch. Support is $3.61 1/4 to $3.59 1/2, we may touch $3.61 1/4 but assuming no surprises from the President tonight I think the first support level will hold. I believe corn is searching for a bottom and I am taking a more aggressive approach to protecting upside price risk on feed needs. We still need to get back above $3.63 1/4 and close there on a Friday if we want to show further signs of a bottom.

MEAL - May '09 Electronic
Open - $272.20, High - $275.00, Low - $269.50, Close - $275.00 Up $1.70

As mentioned in corn I am now referring to the May '09 meal contract instead of the March because of pending expiration. As a review from yesterday I said; if we continue to trade above $270.70 we should begin to make our way back higher with our first target at $295.30, $302.30 and ultimately $325.20. Today's close was at $275.00 which once again is above my key area of $270.70. I failed to mention another area of resistance when I gave targets yesterday and its $281.20 basis the May '09 contract.

The $281.20 area is the 50% level between the Dec '08 low and the Jan '09 high so we need trade above this level for a day or two before I feel very comfortable saying $295.30 is our next target. I still feel like soybean meal is trying to bottom this week but like I said yesterday I need confirmation first and I don't have it yet.

Bottom line - With the Dow Jones rallying into its close today I believe it will bring support to the grain markets tonight therefore I look for meal to open higher tonight. There is one thing I don't like on the hourly chart (very short-term) is if we gap higher tonight and retreat there is a small sell signal at $274.50 on a sell stop with the risk management buy stop above the most recent high. I WILL NOT take this trade tonight because of all the other longer-term indications I get of a potential bottom. Resistance for tomorrow is $276.70 and then $281.20 and support will be $272.30 to $271.60. I believe we will have an early low and a late high tomorrow.

HOGS - April '09 GLOBEX
Open - $57.60, High - $57.95, Low - $56.875, Close - $57.70 Down $.525

Flat out called hogs wrong today on support and resistance targets. I mentioned yesterday there was a buy signal on the intra-day charts at $58.05 but I wouldn't take that trade because the daily charts were so lackluster, this was a good thing today. There is really nothing good to talk about on the fundamental side from a short-term perspective, cash remains weak and we can't seem to light a fire under the cutout.

April '09 hogs actually had good price action today if you are looking for signs of a potential reversal in the market. I have a cycle indicator that says yesterday we were near the bottom of the cycle and today's price action confirms that to me BUT I need to see good buying above today's high of $57.95 and a close above this level tomorrow. A close tomorrow above $70.425 in the June '09 contract would also be beneficial for the prospect of a rally in that contract. When I talk about reversals and rallies I am looking at a shorter-term basis and not calling market bottoms because we need much more confirmation than what we have right now.  The information I am giving you on the April and June '09 contracts are just a conditional setup right now.

Bottom line - The cutout was down $.17 tonight which is better than yesterday's number of down $.81 but we can't get around the fact that it is still lower. It sounds like most packers are out of the market for buying pigs this week (at the moment) to continue pressuring the cash market looking to increase the demand for product/cutout. Today is confusing because we have a bunch of bearish fundamental news out there but the charts are showing signs of a possible change in direction. I am a technician so I will go with what I objectively see in the charts. I see support for tomorrow at $57.40 and then $57.25 and resistance above the market is $57.95 and if we manage to sustain trade above $57.95 we should trigger some buy stops to cover some short positions AND it is a buy signal on my chart. IF this buy signal is good and starts a rally over the coming week(s) our next upside target would be $60.475. I wouldn't get aggressive with this signal because of the fundamental situation we are in but I want to talk about it so you know it is there. The way I am handling risk of a potential reversal is using puts to protect downside risk. I'm looking for pressure early and then stabilization as the day progresses.

NW_LS500
Des Moines, IA     Tue, Feb 24, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Monday's Close:         Fresh loins weak to 2.00 lower;
butts 1.00-2.00 lower; sknd hams 17-20 lbs steady, 20-23 lbs steady to 1.00
lower, 23-27 lbs steady to 2.00 higher; sdls bellies steady to 2.00 lower; lean
trimmings steady to 2.00 lower. Trading slow to moderate, with mostly light
demand and moderate to heavy offerings.


-----------------------------------------------------------------
Loads PORK CUTS          :            125.75
Loads TRIM/PROCESS PORK  :              11.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/24       136.8      56.02   71.03   60.10  36.40  98.15 40.66  71.27
Change :               -0.17   -1.17   -1.68   3.54  -1.63  0.25  -0.49
-----------------------------------------------------------------------

THE USDA AFTERNOON CASH REPORT WAS NOT AVAILABLE AT THE TIME OF THIS POST.

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.

Jeremy Knutson

CORN - March '09 Electronic
Open - $3.50, High - $3.59 3/4, Low - $3.49 1/2, Close - $3.51 3/4 Up $.01 1/2
I said on Friday that I had a buy signal for March '09 corn at $3.46 3/4 and the market needed to close above this level on Monday (today) for the signal to remain in tack.  As of right now the signal is still good but the market failed to honor the price action of the overnight trade.  I also said we are up against the $3.54 3/4 down trend line that is providing us with resistance and again today it held.

We saw a big drop in the Dow Jones going into the close of its trade today and should provide some pressure on tonight's commodities open.  I also said Friday the Dow Jones had buy signal at 7447 if the market could manage to get back to this level which it did not therefore the signal is null and void. 

Bottom line - I expect March '09 corn to open mixed to lower tonight testing $3.48 3/4 before finding some support.  If the market fails to hold $3.48 3/4 then the next target would be $3.42, our most recent low.  As aforementioned the buy signal is still intact but I would like the market to close above the down trend line at $3.52 before I get excited.  We made it through my projection points from Friday and I look for tonight/tomorrow to be sideways to lower and will probably take some direction from Wall Street.

MEAL - March '09 Electronic
Open - $269.90, High - $279.90, Low - $268.60, Close - $276.30 Up $6.30
March '09 meal was trading firmer most of the day with very little downside pressure.  The March '09 contract touched and went through my targets from Friday of $272.60 to $273.60 and I said I wouldn't hold my breath for $277.10 but we traded above it for an ultimate high of $279.90 and closed just below the resistance level.

I am moving to May '09 meal for commentary instead of the March contract due to its pending expiration.  When I look at the May '09 meal contract I begin to look for a bottom.  Today we got back above $270.70 which is the 62% retracement level back to our low on Dec 5th 2008.  If we continue to trade above $270.70 we should begin to make our way back higher with our first target at $295.30, $302.30 and ultimately $325.20.  I am not making this projection yet because my thoughts are conditional and I need confirmation first.

Bottom line - I look for support in the May '09 meal at $272.20 and resistance to be $276.70.  It looks like the meal market wants to make its bottom this week but like I said I need confirmation first.  I do like the setup we have so if you don't have meal covered or enough covered now is the time to purchase some coverage via a known risk strategy leaving your downside open.

HOGS - April '09 GLOBEX
Open - $58.125, High - $58.65, Low - $57.95, Close - $58.225 Up $.275
I said last Friday I thought we could test $59.05 and possibly $59.45 but we didn't get very close to these numbers today.  The prospects looked good when we opened but then settle down as we began trading for a few minutes.  We tested Friday's low today and got within $.05 of it and held which works for me.  The April '09 contract was very lackluster today and didn't give me any real direction other than a possible pause before making another stab lower.

On the hourly chart I see an intra-day buy signal at $58.05 with a risk management sell stop at $57.65.  I don't know as though I would make this trade because I didn't see anything on the daily chart that gives me great reason to do so.  I do see the cycle coming to a point where we could now see better trade for the remainder of the week but I like to focus more on price action and like I said it really didn't tell me much today.

Bottom line - I look for April '09 hogs to trade better this evening and mixed tomorrow with a potential test of $59.45 as I mentioned last Friday.  Cutout was down $.81 today and cash was considerably lower again today.  Packers are continuing to regain profit margin on a per pig basis with the cash market moving lower at a faster pace than cutout.  I look for support to be $57.90 tomorrow and if we break that level then we open ourselves up to another leg lower.  From a trading perspective I can see a bounce tomorrow but I still see nothing on the daily chart to get me excited about the prospect of a big rally.

NW_LS500
Des Moines, IA     Mon, Feb 23, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Friday's Close:         Fresh loins 2.00-3.00 lower;
butts steady to 2.00 lower; sknd hams 17-23 lbs firm, 23-27 lbs steady; sdls
bellies 14-16 lbs steady to 2.00 lower; lean trimmings steady. Trading slow,
with mostly light demand and moderate offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :              56.0
Loads TRIM/PROCESS PORK  :              16.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/23        72.0      56.19   72.19   61.78  32.86  99.78 40.41  71.76
Change :               -0.81   -0.63   -0.94  -3.02  -0.06 -0.62  -0.50
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Mon, Feb 23, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :  2.42 lwr   :  3.07 lwr   :  2.71 lwr   :  1.68 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 46.00-57.91 : 47.00-57.91 : 47.00-57.91 : 46.00-56.00
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    54.49    :    54.56    :    54.98    :    53.95
--------------------------------------------------------------------------
Head Count      :   20,892    :    7,104    :   10,973    :    9,919
==========================================================================

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.

Jeremy Knutson

IF YOU HAVE ANY SUGGESTIONS TO IMPROVE THIS COMMENTARY PLEASE EMAIL
ME AT jknutson@hurleyandassociates.com.

CORN - March '09 Electronic
Open - $3.53 1/4, High - $3.54 3/4, Low - $3.42, Close - $3.50 1/4 Down $.03

All I have to say today is Dow Jones.  The Dow Jones tested its November 2008 low of 7449.38 yesterday and made a new low of 7447.55 but managed to close at 7465.95 a few points above the November low.  Today was a different story; the Dow tested this level again and moved below this level with no particular concern.  We made a new low of 7249.47 which is still above the ever so important October 2002 low of 7197.49.  I have a buy signal (this isn't a recommendation) on the Dow Jones index at 7447 if we can get to this level either today or Monday.  If I were actually making the trade it would be on a buy stop with a risk management sell stop at 7220.

The Ag commodities markets in general took their lead from the Dow Jones today as everything was weak across the board.  March '09 corn made its lows early in the day trading all the way down to $3.42 before coming back some as we moved into the closing minutes of trade.  There was a buy signal (not textbook) on the daily chart at $3.46 3/4.  March '09 corn will need to stay above $3.46 3/4 on Monday for this signal to be good but the actual risk management sell stop would be at $3.41.

Bottom line - I spoke of the Dow Jones in my comments above but I was writing while the corn market was still open.  The Dow bounced off of its low and started a rally as the grain market was closing.  I expect March '09 corn to trade higher on Monday with an upside target of $3.56 1/4.  We should see buy stops triggered above today's high of $3.54 3/4.  We have been butting up against the down trend-line recently and that resistance level is $3.54 3/4 for Monday. 

MEAL - March '09 Electronic
Open - $277.40, High - $277.90, Low - $268.00, Close - $270.00 Down $6.50

$269.80 is a 62% retracement back to the low of $235.00 and today was our first test of this level.  March '09 meal barely closed above the retracement level but it did close above it.  The March '09 contract seems as though it wants to take a small breather here for the moment.  I don't expect any major rallies but I do look for a correction up to the $272.60 to $273.60 area with a possible test of $277.10.

I exited my long $290.00 March '09 puts today (because of expiration) and rolled down my long $320.00 April '09 call to an April $280.00 call for $6.50.  I also exited a short $350.00 May '09 call option I sold against my original long $320.00 April '09 call option.  I sold the call for $10.00 and bought it back for $1.00 so we had a profit of $9.00 to offset some of the cost of my original long $320.00 April '09 position.  The reason I sold the May call to help pay for the April call is I wanted upside coverage after I exited my long futures positions but I didn't want the exposure of a futures position.  I then put this call spread on ($320 April vs. $350 May) for a net cost of $5.50.  I also rolled the option down from $320.00 to $280.00 as mentioned above for $6.50 so I increased the cost of my $280.00 call option to $12.00 but I had a profit in our $290.00 March '09 put of $12.50 to cover my cost and move my ceiling down $40.00/ton.

Bottom line - As I said above I expect the market to be firmer come Sunday night and Monday.  I look for the $272.60 to $273.60 area to be tested with a possible test of $277.10 although I will not hold my breath for $277.10.

HOGS - April '09 GLOBEX
Open - $60.70, High - $61.00, Low - $57.90, Close - $58.20 Down $2.375

April '09 hogs have taken a nosedive since my last posting.  I said in my last posting the odds of an April '09 market bottom were increasing daily but I wasn't going to make that bold of a prediction to say the market had bottomed.  The market completely shrugged off last week's performance and took back all of the gains and then some.

I didn't like the fact that we challenged our contract low yesterday and then made new lows today.  I purchased some April '09 $59.00 put options for the time being because we violated our contract low.  I did this around the open of today's trade and I will hold these puts until I see signs of market improvement.  

Bottom line - I see the hog market making an early low on Monday and then firming as the day moves forward.  The cash was significantly lower today based on reduced kills but the cutout was only down $.22 so the packers regained some of their packing margin.  It is possible to see a test of $59.05 and then $59.45 on Monday.  

NW_LS500
Des Moines, IA     Fri, Feb 20, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Thursday's Close:       Fresh bone-in loins not tested;
butts 2.00-3.00 lower; sknd hams 20-23 lbs steady to firm, 23-27 lbs steady;
sdls bellies 14-16 lbs steady; lean trimmings 2.00 lower. Trading slow, with
light to moderate demand and mostly moderate offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :              43.0
Loads TRIM/PROCESS PORK  :              10.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/20        53.0      57.00   72.83   62.72  35.89  99.84 41.03  72.26
Change :               -0.22    0.76   -1.03  -5.17   0.39  1.00    unc
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Fri, Feb 20, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :  2.23 lwr   :  3.02 lwr   :  2.93 lwr   :   .18 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 46.50-62.90 : 46.50-62.90 : 46.50-62.90 : 47.50-57.50
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    56.61    :    57.14    :    57.42    :    55.63
--------------------------------------------------------------------------
Head Count      :   23,888    :    9,076    :   13,302    :   10,386
==========================================================================

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.

Jeremy Knutson

IF YOU HAVE ANY SUGGESTIONS TO IMPROVE THIS COMMENTARY PLEASE EMAIL
ME AT jknutson@hurleyandassociates.com.

Today's post will probably be the last until Thursday of next week as I will be out of the office
and unable to provide quality commentary.  Please check in for updates as I may have a chance
to post.

NW_LS500
Des Moines, IA     Wed, Feb 11, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Tuesday's Close:        Fresh bone-in loins and butts
firm; sknd hams 17-20 lbs steady, 20-27 lbs unevenly steady; sdls bellies steady;
lean trimmings firm on a light test. Trading very slow, with light to moderate
demand and offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             60.25
Loads TRIM/PROCESS PORK  :               7.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

          Calculations for a 200 lb Pork Carcass
       53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
        Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/11        67.3      58.67   77.30   63.41  37.94 100.47 41.70  72.34
Change :                0.86    0.90    0.81   0.23  -0.74  2.25  -0.03
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Wed, Feb 11, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
               :  National   :    Iowa     :   Western   :   Eastern
               :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
  Base Price is the price from which no discounts are subtracted and
  no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :  1.82 hgr   :  1.81 hgr   :  1.93 hgr   :  2.36 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 43.00-62.16 : 45.00-62.16 : 43.00-62.16 : 43.50-60.50
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    57.06    :    58.86    :    58.94    :    53.12
--------------------------------------------------------------------------
Head Count      :   32,753    :   17,616    :   22,197    :    8,101
==========================================================================

Jeremy Knutson

IF YOU HAVE ANY SUGGESTIONS TO IMPROVE THIS COMMENTARY PLEASE EMAIL ME AT jknutson@hurleyandassociates.com. 

NW_LS500
Des Moines, IA     Tue, Feb 10, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Monday's Close:         Fresh 1/4 trim loins weak;
butts 1.00-2.00 higher; sknd hams 20-23 lbs mostly 2.00 higher, 23-27 lbs
mostly 2.00 lower; sdls bellies steady; lean trimmings steady to mostly 2.00
lower.  Trading moderated, with light to moderate demand and moderate to heavy
offerings.


-----------------------------------------------------------------
Loads PORK CUTS          :            131.80
Loads TRIM/PROCESS PORK  :              23.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/10       154.8      57.81   76.41   62.60  37.71 101.21 39.45  72.36
Change :                0.06    0.06    2.82  -0.41  -0.16 -0.91  -0.02
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Tue, Feb 10, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :  1.44 hgr   :  2.05 hgr   :  2.01 hgr   :   .97 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 44.00-58.78 : 45.00-58.78 : 45.00-58.78 : 44.00-55.55
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    55.22    :    57.15    :    57.08    :    50.92
--------------------------------------------------------------------------
Head Count      :   26,895    :   13,993    :   18,794    :    8,101
==========================================================================

Jeremy Knutson

IF YOU HAVE ANY SUGGESTIONS TO IMPROVE THIS COMMENTARY PLEASE EMAIL ME AT jknutson@hurleyandassociates.com. 

Bottom line - if we breach the support level of $3.76 1/2 tonight/tomorrow then I see us challenging today's low (actually Sunday nights low) of $3.72 1/2.  $3.69 1/4 is a target area for me before we find good support and below that is $3.66.  I think March '09 corn wants to rally but first I think we need a small correction to last week's movement.  $3.69-$3.66 is a very short-term target area for me but I still look for the market to move higher over time.  I don't have an aggressive long position in place at this time but I will change my mind in a heartbeat if the market tells me to.  Keep your feed coverage in place.

Bottom line - It feels like we will see a test of today's low of $310.50 at some point either tonight or tomorrow.  I do see a buy signal in the 60 min chart if and only if we make new lows below $310.50 and then come right back up through those levels.  The buy would be a $311.00 buy stop with a risk management protective stop below the most recent low.  I think a test of $307.80 to $305.30 is in the cards in the near future.

NW_LS500
Des Moines, IA     Mon, Feb 09, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Friday's Close:         Fresh 1/4" trim loins steady;
butts 2.00-4.00 higher; sknd hams steady to weak; sdls bellies not established;
lean trimmings unevenly steady.  Trading slow to moderate, with light to
moderate demand and offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             46.10
Loads TRIM/PROCESS PORK  :              24.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/09        70.1      57.75   76.35   59.78  38.12 101.37 40.36  72.38
Change :                0.92    3.71    1.82  -2.58   0.48  0.02   0.07
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Mon, Feb 09, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :   .77 lwr   :   .87 lwr   :   .74 lwr   :   .96 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 42.50-56.75 : 45.00-56.75 : 42.50-56.75 : 43.00-55.41
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    53.45    :    54.56    :    54.69    :    51.89
--------------------------------------------------------------------------
Head Count      :   24,218    :    9,284    :   13,415    :   10,758
==========================================================================

Jeremy Knutson

IF YOU HAVE ANY SUGGESTIONS TO IMPROVE THIS COMMENTARY PLEASE EMAIL ME AT jknutson@hurleyandassociates.com. 

CORN - March '09 Electronic
Open - $3.58, High - $3.72 1/4, Low - $3.56 1/2, Close - $3.71 1/4 Up $.13

March '09 corn opened slightly weaker last night, tested the $3.56 area like I thought it would and bounced from there.  We got off to a slower start this morning but it didn't take long for the buyers to kick in today.  There was good volume in today's upward move of the market compared to the last few days were down.  

I didn't buy corn today because I am already long futures against $3.60 puts equaling a synthetic call option.  I also have some short $3.80 May '09 puts and long $3.50 April '09 puts for (reverse call spread) some additional coverage to the upside because I didn't want to be flat long futures with my risk unknown.  It looks like the market wants to call this a bottom and move higher from here.  We closed below $3.59 yesterday but like I said I wanted to see it close below that level for two days before I changed my mind about market direction. 

Bottom line - I expect March '09 corn to open slightly lower tonight and move lower initially to find some support before making another run higher.  Ultimately I think we will see additional buying above today's high of $3.72 1/4 tonight or tomorrow.  $3.69 is a support area I think we could test tonight before we get the market trading higher again.  I will again go with better trade tonight and tomorrow with an ultimate objective of $3.81 1/4 to $3.87 1/4.  I think $3.81 1/4 is possible for tomorrow but $3.87 1/4 is stretching it.

MEAL - March '09 Electronic
Open - $299.90, High - $311.00, Low - $298.70, Close - $308.00 Up $7.50

As I said yesterday I had conflicting information, I have a cycle indicator suggesting we can still move lower but the price action suggested the market's recent slide was slowing.  We moved higher as expected today and we also closed above the $305.00 level I have been talking about.  Now that we have closed above $305.00 I am looking for the next close to be above $309.00.  I we can sustain trade and close above $309.00 for a couple of days (Friday especially) I will then project a challenge of the $326.00 high from January 23rd, 2009.  

Bottom line - I am not a huge fan of the way the March '09 contract closed today because it broke $3.00 in the last hour of trade.  I expect the March '09 contract to open slightly lower tonight and possibly test $305.80 and find some support.  I still think we have more upside to go tomorrow with new buying above today's high of $311.00.

HOGS - April '09 GLOBEX
Open - $60.75, High - $60.875, Low - $59.80, Close - $60.25 Down $.625

I said yesterday I expected an early low and a late high today and we did get that with the day session low being set in the first hour and the high was matched in the 2nd, 3rd and 4th hour of trade.  We closed the day right at the old contract low of $60.25 and if we have two consecutive closes below this level it will not look good for the April '09 contract.  I feel like the big boys are playing games with the market to make us think one thing so they can do another.

That said I have a big buy signal at $60.65 on a BUY STOP ONLY.  This signal is only good if the market rallies back up through this level.  If the buy stop is touched I would have a risk management stop $.25 below the most recent low.  IF this signal is good it is one that will send this market screaming higher.  This signal plays right into my little theory that the big guns are playing games.  I would expect massive short-covering if this signal is good.  If you have noticed I have used the word if several times in the last sentence so please don't bet the farm on a possibility.  I am stating what I see in the charts and what I talk about should not be taken as recommendations because like always I can change my mind and position hours before you even know about it.  Please work with someone you trust and do what is right for your operation.  

Bottom line - I am looking for tomorrow's low to be during the first hour of trade if not the open.  I think we will have better/higher trade all day tomorrow unless we get a beat down in the cash market then all bets are off.  If we stay constant I expect better trade tomorrow with a possible test of $61.20 to $61.55 and if this signal is good I wouldn't be surprised to see a limit move higher.  Limit is not my projection tomorrow but I throw it in there because of the capabilities of this signal, it is one of the most powerful signals a chart can have at either a top or bottom.  Again, stay objective in your decisions and don't get caught up in the hype of market potential in my comments. 

NW_LS500
Des Moines, IA     Thu, Feb 05, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Wednesday's Close:      Fresh 1/4" trim loins
not established; boston butts steady to 1.00 higher;, sknd hams 17-20 lbs
steady, 23-27 lbs steady to 1.00 higher; sdls bellies 14-16 lbs steady;
and lean trimmings not tested. Trading slow, with light demand and mostly
moderate offerings.


-----------------------------------------------------------------
Loads PORK CUTS          :              71.0
Loads TRIM/PROCESS PORK  :
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/05        71.0      57.14   74.66   58.23  40.38 101.13 39.34  72.31
Change :               -0.02   -1.41   -0.43   0.01  -0.51  1.63    unc
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Thu, Feb 05, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :  1.30 lwr   :  1.55 lwr   :  1.53 lwr   :   .57 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 44.00-58.45 : 44.00-58.45 : 44.00-58.45 : 44.00-56.08
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    54.55    :    55.52    :    55.75    :    52.70
--------------------------------------------------------------------------
Head Count      :   24,971    :   11,311    :   15,212    :    9,295
==========================================================================

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.

Jeremy Knutson

NW_LS500
Des Moines, IA     Wed, Feb 04, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Tuesday's Close:        Fresh loins generally steady;
butts steady to 1.00 lower; sknd hams 17-23 lbs 3.00-5.00 lower, 23-27 lbs
steady to 1.00 higher; sdls bellies steady; lean trimmings firm. Trading slow
to moderate, with light to moderate demand and offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             103.5
Loads TRIM/PROCESS PORK  :              11.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/04       114.5      57.09   76.07   58.66  40.37 101.64 37.45  72.31
Change :                0.09    0.44   -1.52   3.83   0.08 -1.18    unc
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Wed, Feb 04, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :  1.52 lwr   :  1.65 lwr   :  1.70 lwr   :  1.08 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 42.50-60.14 : 46.00-60.14 : 44.00-60.14 : 42.50-56.76
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    55.72    :    57.19    :    57.40    :    53.27
--------------------------------------------------------------------------
Head Count      :   24,429    :   11,044    :   14,279    :    9,970
==========================================================================

Jeremy Knutson

CORN
This is going to be short and sweet tonight so here it goes.  Corn did not close below the $3.59 1/2 area I have been talking about it.  I said yesterday that I didn't think we would have a close below that level and the market gods almost made an example out of me today but they didn't.

Bottom line - I am looking for better trade tomorrow, March '09 touched my resistance level of $3.72 1/4 exactly today this also was the high.  I think we will have an early low and a late high tomorrow.  I am continually adding to my long call position as I bought more today.

MEAL
I bought more meal today to get back up to a full position in the March '09 contract.  I was able to get my purchases done at $300.60 on average and this is against my $290.00 puts so I still have the downside open if I am wrong.

Bottom line - I expect a test of $305.50 tomorrow which was today's high.  The March '09 contract needs to close above $305.00 again soon for me to be confident we are going to make a move higher.  I have my finger on the trigger if the market feels heavy because my cycle indicator still points lower but there are other signs we could be moving higher for the time being.  I will continue to monitor this position closely.

HOGS
April '09 hogs set out to make me look like an idiot again today but then ended up validating my opinion from yesterday of early lows and late highs.  The market sold off hard early in the session being down over $1.00/cwt at one point and then rallied into the closing hours of the session.

Bottom line - I expect buy stops above today's high of $62.52 and from there we could see some acceleration to the upside.  I am looking for an early low again tomorrow and a late high because I really liked today's action.  We challenged Friday's low and even made a new one and came charging right back, I LIKE IT A LOT.  I don't want to count my chickens before they are hatched but I like the hog market more and more each day.   

NW_LS500
Des Moines, IA     Tue, Feb 03, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Monday's Close:         Fresh loins generally steady;
butts steady; sknd hams 17-23 lbs not tested, 23-27 lbs steady; sdls bellies and
lean trimmings steady. Trading slow to moderate, with light to moderate demand
and offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             91.75
Loads TRIM/PROCESS PORK  :              19.0
-----------------------------------------------------------------

USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
02/03       110.8      57.00   75.63   60.18  36.54 101.57 38.63  72.31
Change :                0.21    0.70   -0.17   1.06   0.36 -0.13  -0.10
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Tue, Feb 03, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

--------------------------------------------------------------------------
                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :   .62 lwr   :   .64 lwr   :   .66 lwr   :   .19 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 42.50-61.49 : 45.00-61.49 : 45.00-61.49 : 42.50-60.81
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    57.24    :    58.90    :    59.20    :    54.28
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Head Count      :   34,012    :   14,994    :   20,402    :   13,598
==========================================================================

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.

Jeremy Knutson

NW_LS500
Des Moines, IA     Mon, Feb 02, 2009     USDA Market News

USDA NATIONAL CARLOT PORK REPORT as of:  3:00 P.M.
Purchases equated to FOB Omaha Basis.

Compared to Friday's Close:         Fresh loins steady to weak;
butts generally steady; sknd hams and sdls bellies 14-16 lbs not tested; lean
trimmings steady to firm. Trading slow, with mostly light demand and light to
moderate offerings.



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Loads PORK CUTS          :              36.0
Loads TRIM/PROCESS PORK  :               8.0
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USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.

           Calculations for a 200 lb Pork Carcass
        53-54% lean, 0.65"-0.80" backfat at last rib
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         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
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02/02        44.0      56.79   74.93   60.35  35.49 101.20 38.76  72.41
Change :               -0.15    0.54    0.61  -3.32  -0.13  0.09    unc
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NW_LS831
Des Moines, IA     Mon, Feb 02, 2009     USDA-IA Dept of Ag Market News

National Direct Hog Price Comparison

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                :  National   :    Iowa     :   Western   :   Eastern
                :             :  Minnesota  :  Cornbelt   :  Cornbelt
--------------------------------------------------------------------------
   Base Price is the price from which no discounts are subtracted and
   no premiums are added.
--------------------------------------------------------------------------
BARROWS & GILTS :   .84 lwr   :  1.53 lwr   :  1.17 lwr   :   .34 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 42.50-62.00 : 47.50-61.49 : 46.00-62.00 : 42.50-60.81
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    57.67    :    59.10    :    59.69    :    54.31
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Head Count      :   21,293    :    7,966    :   13,206    :    8,007
==========================================================================