March 2009 Archive for The Lean Hog Perspective

CORN - May '09 Electronic
Open - $3.87 3/4, High - $3.89 1/2, Low - $3.76 3/4, Close - $3.86 1/4 Down $.00 3/4.
Thoughts - Long Term (6 months) - Bullish/Higher

Today was interesting considering we have the USDA March planting intentions report due out tomorrow morning.  May '09 corn was down $.05 in the overnight session then opened the day session made an early low and closed near its high for the day session.  I was surprised to see the corn market as strong as it was with crude oil being down over $4.00/barrel today.  

I made a comment on how weak the U.S. Dollar Index has been after the Government said they were going to buy toxic assets from the banks.  Since my comments the dollar has risen and made near a 50% retracement of its most recent decline which is normal.  I am still of the opinion the dollar is heading south which is obviously good for the commodities markets.  I want to keep a bullish structure to any positions I have on for feed.  As of right now I'm long futures with a $3.80-$3.60 put spread in place on the May '09 contract.  The put strategy allows us to be long the market without getting clobbered if we are wrong.

Bottom line - USDA report out tomorrow so that will trump any direction I have if there is a surprise.  The trade is looking for corn acres to be around 86 million so anything less (85 or less in my opinion) will be positive to corn prices and I look for trade to give us an early low and a late high.  Support in May '09 corn tomorrow should be $3.82, $3.81 and $3.76 3/4 while resistance should be $3.87 1/4, $3.89 1/2 then $3.92.  I had a buy signal at $3.85 today with a risk management sell stop at $3.75 1/2.  Market action today suggests a probable reversal to the upside tomorrow with buy stops above today's high's of $3.89 1/2.

MEAL - May '09 Electronic
Open - $284.30, High - $285.50, Low - $277.70, Close - $281.50 Down $2.30
Thoughts - Long Term (6 months) - Bullish/Higher

As you may have noticed I have added a my long term thoughts in black and white just below the market close on each commodity I talk about.  I try to give a longer-term directional feel to the market but I may forget it sometimes and if you follow along with my comments my short-term commentary can easily be contrary to my long term feel.  I am trying to make my thoughts more clear to you so please let me know if you have suggestions and thanks to those who have.  

Today's low of $277.70 was within $.10 of the 62% retracement of the recent move higher.  The May '09 contract needs to get back above $283.60 for a couple of days before we look to make another run toward $308.90.  I have the same thoughts on meal as I do on corn, I think we will see an early low and a late high tomorrow but remember any surprises in from the USDA and all bets are off.

Bottom line - I am looking for an early low and late high with support at $277.60 and $275.10 and resistance at $282.20 and $285.00.  Looking for the USDA report to give us direction tomorrow but I believe we will see positive trade based on the USDA numbers.  This thought is solely based on the way the SHORT TERM charts look to me as well as the expected weakness in the U.S. Dollar Index.  The dollar thing is a big deal guys.

HOGS - June '09 GLOBEX
Open - $70.60, High - $71.20, Low - $70.525, Close - $70.975 Down $.425
Thoughts - Long Term (6 months) - Friendly

The market was trading the Quarterly Hog & Pig report from Friday which was evidently mildly bearish according to today's trade.  I am looking for a place to lighten my short position this week if the charts suggest we do so.  I have been saying for awhile in my comments that I have a cycle low near the end of March which I still do.  I will be looking for signs and signals that suggest a bottom and look to re-structure my short positions when I see these signs.  Today is the first one; we opened the market below Friday's low and rallied off of the open.  The day and potential signal started out okay but failed to close above the crucial Friday low so I will keep looking.

In doing my research it tells me that June futures move lower from the close of April 1st to the close of April 15th 44.5% of the time by an average of $2.86/cwt and up 55.5% of the time by an average of $3.23/cwt.  I talk about June because I am no longer using April '09 as a hedge vehicle which makes sense as the June has dropped near $3.00/cwt more than April since the week of March 16th (from high to low of the spread).

Bottom line - as I mentioned above I will continue to look for signs in the market to make me look at adjusting my short positions in the market place.  In an effort to find a patter for the next couple of weeks based on the market tendencies since the year 2000; it seems as if the risk is more to the upside than to the downside.  I am looking for an early low and a late high tomorrow; cutout was a non-event today as it was up $.14.  I look for support at $70.52 and $69.52 and resistance should be around $71.35, $71.575 and then $72.20.

NW_LS500
Des Moines, IA     Mon, Mar 30, 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 not reported;
boston butts 2.00 higher in a light test;  sknd hams 17-20 lbs 1.00 lower, 23-27 lbs
3.00 lower, 23-27 lbs 1.00 lower; sdls bellies 14-16 lbs 2.00 lower; lean trim steady to
1.00 lower. Trading slow, with light demand and mostly moderate offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             33.75
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
-----------------------------------------------------------------------
03/30        43.8      57.68   69.33   61.70  40.54  96.19 43.37  76.41
Change :                0.14    0.92    0.62  -0.03  -0.81  0.19  -1.00
-----------------------------------------------------------------------
 

NW_LS831
Des Moines, IA     Mon, Mar 30, 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 :   .08 hgr   :   .04 lwr   :   .15 hgr   :   .44 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 45.50-59.80 : 46.00-59.80 : 46.00-59.80 : 45.50-59.50
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    56.28    :    57.00    :    57.37    :    54.85
--------------------------------------------------------------------------
Head Count      :   23,625    :    8,339    :   13,266    :   10,269
==========================================================================

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.

It has been a week since my last post due to my schedule and illness.  I will refer to my previous comments as a starting point.  

CORN - May '09 Electronic
Open - $3.86, High - $3.92, Low - $3.86, Close - $3.90 3/4 Up $.05
As a review from my last post (03-16-09) I said "The May '09 contract made it through the upside target of $3.92 and looked like it had a great shot at testing the $4.03 number I wrote about last week too but it didn't get the job done as it stalled out at $3.97 1/2.  I am still of the opinion we could test $4.40 in the May '09 contract IF we get closes above $3.92 for a couple of days this week and especially on Friday.  I have one thing I am watching right now and it is a potential sell signal at $3.89 on a stop order.  If the order would be executed there should be a buy stop at $3.98 1/2 to manage risk in the position."

As I mentioned in the paragraph above, the May '09 contract needs to get back above $3.92 in my opinion and hold that level for a day or two before we have a valid shot of testing $4.40 in the May '09 contract.  I am a longer-term bull for the corn market especially after the Government said they will buy $1 Trillion of toxic assets which killed the dollar last week.  I believe we are going to see the corn (commodities) markets move more off of money flow than fundamentals.  

From here on out I want to structure any position I have with a bullish tone for reasons that have nothing to do with fundamentals of the corn market.  I think the market will once again be technically driven especially if the U.S. Dollar index continues its recent decline.

Bottom line - I expect corn to have an early high and a late low tomorrow.  I expect Resistance to be $3.91 3/4 then $3.92 3/4 and support is projected at $3.89, $3.88 1/4 and $3.87 1/4.  The $3.92 area has been like a magnet for the May '09 contract but hasn't moved very far in either direction.  I am bullish corn long-term and will hold my feed coverage in place with known risk strategies but tomorrows action my provide enthusiasm early and then the market should weaken.

MEAL - May '09 Electronic
Open - $294.30, High - $298.70, Low - $289.40, Close - $290.80 Down $3.50
I will review my comments from my last post on March 16th, 2009; I said "My opinion hasn't changed much from a longer-term perspective and I believe ownership is needed in some form at these levels.  I would still like to leave the downside open if possible which points to using options however do what is best for your operation.  I am looking for downside pressure tomorrow with support at $284.10 and $282.70 with an ultimate target of $278.20 but I don't think we will get there tomorrow.  Resistance should be at $290.10 and $291.60.  I expect an early high and a late low but noting to get too excited about to the downside."

My short-term call of $278.20 was off last week as the market never did move that low, the lowest we got was $284.40 which was just above the first level of support from my comments.  The May '09 meal contract filled a gap that was left on March 18th, 2009 at $290.80 which is exactly where we closed today.  I am a longer-term bull in meal as a result of my U.S. Dollar index comments written in the corn commentary above.

Bottom line - it looks like the May '09 meal contract is looking for an early low and a late high tomorrow, opposite of corn.   I expect support to be $289.40, $286.70 and resistance at $294.10, $295.10 and finally $298.70.  I don't think $298.70 is attainable tomorrow but it is still the next level of resistance according to my studies.

HOGS - June '09 GLOBEX
Open - $71.80, High - $72.45, Low - $71.40, Close - $71.775 Down $.95
I will review my post from March 16th, 2009; I said "I am still looking for a run lower in the June '09 contract.  $72.475 is a target that I believe we can touch at some point in the near future.  Unless cash hogs start to move again it just adds to my negative bias that the chart have been showing for days.  My cycle indicator has June '09 hogs trending lower until March 28th before finding a bottom.  I do not follow my cycle indicator solely but it is a part of my decision making process.  Support for June '09 tomorrow is $73.50, $73.10 and $72.47.  Resistance should be $74.425, $74.67 and $75.37.  I expect tomorrow to have an early high and a late low with $73.10 having a good chance of being tested."   

The high on the 17th was $74.20 and the low was $73.22 so I was $.22 off on the resistance number and .12 off on the support number for trade on the 17th.  The market moved higher before it went lower since my last comments but the bottom line is the market backed off like the charts said it should.  I am still have a negative feel toward June '09 hogs for the time being but we have the Quarterly Hog & Pig report out at 2:00 p.m. CST tomorrow which could switch directions with a major surprise however I don't see it.  

$71.95 is a key number for me in June '09 hogs, if we close below it again tomorrow then I look for a test of $69.52 in the June contract however the Pig Report could be a wild card event.  If the market gaps lower tomorrow below $71.40 and then trades back above $71.40 it would signal a buy on the candlestick charts at $71.65 on a buy stop only.  If the buy stop it filled then a risk management sell stop should be place $.25 below the most recent low for the day.  I will not buy the hog market based on this signal, I need to see more than this potential signal. 

Bottom line - I am looking for an early low in June '09 hogs tomorrow and then strengthen as the day progresses.  The cycle indicator still has the market moving lower into the first part of next week before finding support.  Support for tomorrow is $71.40, $70.85 then all the way down to $69.52 but I don't think we get there.  Resistance for tomorrow should be $72.10, $72.32 and $72.52.

NW_LS500
Des Moines, IA     Thu, Mar 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 unevenly steady;
butts steady; sknd hams 2.00-3.00 lower; sdls bellies 14-16 lbs 2.00 lower; lean
trimmings weak to 4.00 lower. Trading moderate, with light to moderate demand
and mostly moderate offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             109.0
Loads TRIM/PROCESS PORK  :              26.0
-----------------------------------------------------------------

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
-----------------------------------------------------------------------
03/26       135.0      57.28   68.35   58.86  41.00  96.99 43.26  77.41
Change :               -0.58    0.33    2.02   2.16   1.98 -2.15  -4.39
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Thu, Mar 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 :   .25 hgr   :   .27 hgr   :   .39 hgr   :   .07 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 45.50-58.11 : 46.00-58.11 : 46.00-58.11 : 45.50-55.41
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    55.64    :    56.48    :    56.54    :    53.71
--------------------------------------------------------------------------
Head Count      :   26,173    :   11,986    :   17,820    :    7,968
==========================================================================

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 - $3.84 1/2, High - $3.97 1/2, Low - $3.81 1/2, Close - $3.91 1/2 Up $.03
Reviewing my comments from my last post on Thursday the 12th of March, I said "I have been saying for quite some time that I am not a bear at these levels but now we have made some major strides to begin to confirm this thought.  I wanted to see the market get above $3.68 before I got excited about a major rally and we obviously closed well above that today.  IF YOU DO NOT HAVE FEED CORN PROTECTION IN PLACE I WOULD AT MINIMUM BUY SOME OUT OF THE MONEY CALL OPTIONS!!!  We have finally broken our downtrend line that descends from our January '09 high and we have closed above it for the fifth consecutive day.  If we manage to close May '09 corn above $3.92 tomorrow or by next Friday then my next target is $4.40 May '09 corn."

The May '09 contract made it through the upside target of $3.92 and looked like it had a great shot at testing the $4.03 number I wrote about last week too but it didn't get the job done as it stalled out at $3.97 1/2.  I am still of the opinion we could test $4.40 in the May '09 contract IF we get closes above $3.92 for a couple of days this week and especially on Friday.  I have one thing I am watching right now and it is a potential sell signal at $3.89 on a stop order.  If the order would be executed there should be a buy stop at $3.98 1/2 to manage risk in the position.  

Bottom line - I see the signal at $3.89 as a good possibility which could give us a chance to move lower and give back some of this move.  I do not think the market is done I just believe we will see a pull back.  The overnight just opened as I write this and the signal was good at $3.89 which is where we opened the session.  If $3.97 1/2 is breached then the signal has failed and it is onward and upward.  I am expecting a test of $3.87 1/2 to $3.81 1/2 tomorrow with the upside targets at $3.97 1/2 but I believe we will be lower tomorrow.  I expect an early high and late low for tomorrow's trade.

MEAL - May '09 Electronic
Open - $273.70, High - $290.00, Low - $272.50, Close - $288.40 Up $11.70
As a review from Thursday of last week I said "Not much different from the corn, the market was close to my first support level of $268.20 but above my resistance level by $3.50.  I missed exiting my short meal futures yesterday by $.10 which made for a tough pill to swallow today when I exited for a profit of around $.30 on the position.  I exited because I need upside coverage for meal and I only sold the futures so I wouldn't lose all of the equity in my $280.00 April call option.  I made a mistake, I said yesterday the April call expires next Friday but it is the following Friday the 27th.  Like corn, IF YOU DON'T HAVE MEAL COVERAGE IN PLACE WITH A KNOWN RISK STRATEGY I WOULD STRONGLY SUGGEST AT MINIMUM BUYING AN OUT OF THE MONEY CALL but talk with your broker to make sure it is right for your operation."

Bottom line - My opinion hasn't changed much from a longer-term perspective and I believe ownership is needed in some form at these levels.  I would still like to leave the downside open if possible which points to using options however do what is best for your operation.  I am looking for downside pressure tomorrow with support at $284.10 and $282.70 with an ultimate target of $278.20 but I don't think we will get there tomorrow.  Resistance should be at $290.10 and $291.60.  I expect an early high and a late low but noting to get too excited about to the downside.

HOGS - June '09 GLOBEX
Open - $73.95, High - $74.60, Low - $73.65, Close - $74.075 Down $.15
As a review from last Thursday I said "I am still negative the hog market however I did add a call strategy to my short futures today because as I have said before, what I think and what the market does are two very different things!  I have upside in the June '09 contract up to $80.00 before I need to adjust my position.  I will stay with my negative bias toward the market until we close above $74.30 for at least two days and have sold trade action above it.  The weekly chart is showing signs of caution if you were long the market but I need to see tomorrow's close to be sure and it is a caution sign not a sell signal. "

My opinion has NOT changed in June '09 hogs.  As mentioned in the paragraph above I will remain negative to the hog market until we get a close above $74.30 in the June '09 contract for at least two days, it has yet to happen.  Friday's trade action on the chart looked very negative to me, however, I expected follow through to the downside today which we got very little of.  The cash market isn't in the best of shape but packer margins have since come around with last week's run in cutout and general weakness in cash.  

Bottom line - I am still looking for a run lower in the June '09 contract.  $72.475 is a target that I believe we can touch at some point in the near future.  Unless cash hogs start to move again it just adds to my negative bias that the chart have been showing for days.  My cycle indicator has June '09 hogs trending lower until March 28th before finding a bottom.  I do not follow my cycle indicator solely but it is a part of my decision making process.  Support for June '09 tomorrow is $73.50, $73.10 and $72.47.  Resistance should be $74.425, $74.67 and $75.37.  I expect tomorrow to have an early high and a late low with $73.10 having a good chance of being tested.

NW_LS500
Des Moines, IA     Mon, Mar 16, 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 bone-in loins steady;
butts steady to 1.00 lower; sknd hams 20-23 lbs 2.00 lower, 23-27 lbs unevenly
steady; sdls bellies not established; lean trimmings 2.00 higher. Trading slow,
with light to moderate demand and offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             40.00
Loads TRIM/PROCESS PORK  :               9.0
-----------------------------------------------------------------

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
-----------------------------------------------------------------------
03/16        49.0      59.51   74.39   62.83  36.27  96.65 43.98  81.63
Change :               -0.04   -0.74   -0.91   1.99  -0.03  0.04   0.10 

-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Mon, Mar 16, 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 :  1.58 lwr   :  2.53 lwr   :  2.38 lwr   :   .61 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 44.75-58.11 : 47.25-57.00 : 44.75-57.00 : 46.00-58.11
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    55.65    :    55.24    :    55.41    :    55.97
--------------------------------------------------------------------------
Head Count      :   17,397    :    5,884    :    9,651    :    7,297
==========================================================================

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 - $3.64, High - $3.86 3/4, Low - $3.62 3/4, Close - $3.85 1/4 Up $.20 3/4
As a review from yesterday I said "The May '09 futures settled at $3.64 1/2 which is 1/4 cent above the 50% retracement level from our most recent low to our most recent high.  This area should provide support and if it doesn't we should see $3.59 1/2, $3.58 and $3.55 1/2.  I am looking for more weakness in the overnight and early day session tomorrow.  I expect a test of $3.59 1/2 at some point between tonight and tomorrow's close.  Support for May '09 corn is $3.62, $3.59 1/2 and $3.58.  Resistance is $3.66 3/4, $369 1/4 and $3.71 1/2.  I expect an early low and a late high tomorrow."

We didn't see a test of the $3.59 1/2 area like I thought we would but we did hold my first level of support at $3.62.  Once again the market blew through my resistance levels with no problems at all but the market action was exactly what I thought it would be an early low and a late high.  I purchased corn today at $3.79 which is higher than I would have liked but discipline said I needed to.  I also moved my put options from $3.60 to $3.80 to protect the downside risk of my long futures positions so now I have near a full position on in feed corn to protect me to the upside if the market continues its climb.  Rumor today is that a large, well followed firm will decrease its corn acreage estimate and therefore got the market going to the upside along with favorable outside market conditions.  

I have been saying for quite some time that I am not a bear at these levels but now we have made some major strides to begin to confirm this thought.  I wanted to see the market get above $3.68 before I got excited about a major rally and we obviously closed well above that today.  IF YOU DO NOT HAVE FEED CORN PROTECTION IN PLACE I WOULD AT MINIMUM BUY SOME OUT OF THE MONEY CALL OPTIONS!!!  We have finally broken our downtrend line that descends from our January '09 high and we have closed above it for the fifth consecutive day.  If we manage to close May '09 corn above $3.92 tomorrow or by next Friday then my next target is $4.40 May '09 corn.

Bottom line - Huh, where do I start?  If we open BELOW $3.86 3/4 tonight it will be a good open for follow through to the upside but if we open above that then there would be a sell signal at $3.86 that might be attractive based on the reasons why the market rallied.  Rumors that corn acres will decrease.  Again, I am not bearish here but the market rallied off of rumors so those that are in are already in and will probably sell to those who get in late tomorrow if the rumor is true.  My cycles tell me to look for an early high and a late low tomorrow (short-term) but market action looks strong.  I will go with follow through to the upside tomorrow ONLY if we open below $3.86 3/4 tonight.  SUPPORT should be $3.81, $3.78 then $3.75 and RESISTANCE should be $3.92, $4.03 then $4.08 1/2.  I think $3.92 is a possibility for tomorrow but I believe our highs will be in early in the day.

MEAL - May '09 Electronic
Open - $270.00, High - $276.40, Low - $268.60, Close - $276.50 Up $7.00
Reviewing yesterday I said "I am looking for continued weakness in May '09 meal tonight/tomorrow but I think we will see an early low and late high.  We are having a tough time closing above $271.00 to get anything going to the upside.  Support for May '09 meal should be $268.20, $267.20 and then $265.10.  Resistance should be $271.20, $272.10 and then $273.00.  I expect early lows and late highs tomorrow."

Not much different from the corn, the market was close to my first support level of $268.20 but above my resistance level by $3.50.  I missed exiting my short meal futures yesterday by $.10 which made for a tough pill to swallow today when I exited for a profit of around $.30 on the position.  I exited because I need upside coverage for meal and I only sold the futures so I wouldn't lose all of the equity in my $280.00 April call option.  I made a mistake, I said yesterday the April call expires next Friday but it is the following Friday the 27th.  Like corn, IF YOU DON'T HAVE MEAL COVERAGE IN PLACE WITH A KNOWN RISK STRATEGY I WOULD STRONGLY SUGGEST AT MINIMUM BUYING AN OUT OF THE MONEY CALL but talk with your broker to make sure it is right for your operation. 

Bottom line - We close above the $270.70 number I have talked about for awhile now so our next number to get to is $281.20 and if we can sustain trade above this number then could search out $325.30 again.  There are a lot of what ifs in that last sentence but that is how I see it developing.  Similar to corn the market needs to open up lower tonight to prevent a sell signal from forming.  If the May '09 meal opens higher (the higher the more bearish) tonight then there were be a sell signal at $276.00 on a stop with a risk management buy stop above the most current high to exit the trade if the signal is false.  I like the way we closed but I don't like that it was at the very high.  I am expecting an early high tomorrow and late low unless we get a big fundamental surprise.  SUPPORT should be $$274.40, $272.40 then $268.20 and RESISTANCE should be $277.30, $281.20 then $283.90.  

HOGS - June '09 GLOBEX
Open - $72.35, High - $73.90, Low - $72.25, Close - $73.75 Up $1.35
Reviewing yesterday I said "with packer margins still in the red I continue to have a negative bias toward the market because today's action didn't tell me much from a chart perspective.  We closed back above the $71.90 number I spoke of yesterday so we need to continue to watch this level to give us further direction.  Cutout was up $.98 today and it was up $.82 yesterday so we've had back to back days of higher cutout numbers which will be psychologically supportive to the market.  I look for early strength in the market based off of tonight's cutout number but I believe we will have early highs and late lows.  Support for June '09 should be $72.175, $71.70 then $71.47.  Resistance should be $72.675 then $73.25.  I am still not friendly hogs at these levels and I have a cycle high being put in tomorrow and then a lower trend into approximately March 27th.  Again I'm looking for early highs and late lows tomorrow."

I am eating my words today but I have to be honest with myself as well as you the reader and review what took place.  I thought we would see early highs and late lows however it was pretty much the opposite today.  I knew the market would be supported today because of two consecutive days of strength in cutout but I didn't anticipate the market to hold firm as long as it did.  I will say that now that the Goldman roll is complete we should get back to a functional market.  I have found that during the periods of this roll the market does strange things because they need to roll their long positions from the front month to the next and they are very good at getting this done.

I am still negative the hog market however I did add a call strategy to my short futures today because as I have said before, what I think and what the market does are two very different things!  I have upside in the June '09 contract up to $80.00 before I need to adjust my position.  I will stay with my negative bias toward the market until we close above $74.30 for at least two days and have sold trade action above it.  The weekly chart is showing signs of caution if you were long the market but I need to see tomorrow's close to be sure and it is a caution sign not a sell signal. 

Bottom line - I am looking for an early high and a late low in June '09 tomorrow.  On an hourly chart I have a sell signal at $73.90 STOP IF the market trades higher than that and comes back down through this level, the risk management buy stop would be $.25 above the current high if filled.  SUPPORT should be $73.27, $73.07 then $72.85 and RESISTANCE should be $73.90, $74.15-30 then $74.85.  I expect an early high and late low tomorrow.

I wrote my comments prior to seeing cutout and cash but when the information was released from the USDA the globex futures didn't do much.  Hmmmmm what do they have up their sleeve?  Did we see all the buying today and the insiders will sell it tomorrow based off of the big cutout number?  I smell something here, I will leave my comments as is.  

NW_LS500
Des Moines, IA     Thu, Mar 12, 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" tirm loins 1.00
higher; butts steady to 1.00 lower; sknd hams 23-27 lbs steady to 1.00 higher,
other weights not tested; sdls bellies 14-16 lbs not tested, other weights firm;
lean trimmings 3.00 higher. Trading slow, with light to moderate demand and
mostly light offerings.


-----------------------------------------------------------------
Loads PORK CUTS          :             57.13
Loads TRIM/PROCESS PORK  :               6.0
-----------------------------------------------------------------

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
-----------------------------------------------------------------------
03/12        63.1      58.70   74.36   64.12  34.10  96.68 44.44  76.65
Change :                1.62    0.68    0.40   1.78  -0.32  4.36   0.97
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Thu, Mar 12, 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 :   .05 lwr   :   .87 hgr   :   .59 hgr   :  2.07 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 45.50-62.00 : 47.00-62.00 : 46.00-62.00 : 45.50-60.14
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    59.20    :    60.80    :    60.71    :    55.99
--------------------------------------------------------------------------
Head Count      :   24,382    :   11,690    :   16,605    :    7,777
==========================================================================

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 - $3.74 1/2, High - $3.81, Low - $3.62, Close - $3.64 1/2 Down $.11
Reviewing yesterday's comments I said "I am still looking for a place to buy May '09 corn against $3.60 put options as the market didn't get to my target levels over the past couple of days.  We have now traded substantially above the downtrend line in the May '09 contract and I look for a close above $3.68 for a couple of days before getting extremely excited about a major rally.  Support for tomorrow is $3.74 $3.71 3/4, $3.69 and resistance should be $3.81 1/4 and then $3.84.  The market created a sell signal at $3.79 1/2 in the May '09 contract today with a protective buy stop at $3.85."

As stated above the $3.79 1/2 sell signal in May '09 corn was quiet good.  I have been looking to purchase futures against $3.60 puts for the last several sessions but we haven't gotten to an area where I am comfortable putting them on.  My resistance number at $3.81 1/4 for today was good within a 1/4 cent but I was off on my support levels.  I had orders in at $3.64 this morning but then moved them down to $3.58 to see if we could touch it but I really wanted to see the market close today before getting long futures.  It is still my intent to get ownership in the May '09 contract but I plan to buy below today's closing price.

Bottom line - The May '09 futures settled at $3.64 1/2 which is 1/4 cent above the 50% retracement level from our most recent low to our most recent high.  This area should provide support and if it doesn't we should see $3.59 1/2, $3.58 and $3.55 1/2.  I am looking for more weakness in the overnight and early day session tomorrow.  I expect a test of $3.59 1/2 at some point between tonight and tomorrow's close.  Support for May '09 corn is $3.62, $3.59 1/2 and $3.58.  Resistance is $3.66 3/4, $369 1/4 and $3.71 1/2.  I expect an early low and a late high tomorrow.

MEAL - May '09 Electronic
Open - $271.60, High - $276.00, Low - $268.20, Close - $269.50 Down $1.80
Reviewing yesterday's comments I said "I am looking for tonight/tomorrow's trade to open on weaker tone and test support at $269.20 to $268.00 before finding support.  As I said above we need to see the market continue to close above $270.50 before I think we can make a bigger move higher.  If you don't have upside protection in place I would make sure you visit with someone who can help you with this need.  Support for tomorrow is $269.20, $268.00 then $264.40 and resistance is $272.30 and $273.90."

Support for May '09 meal was $.20 away from my lowest support level from yesterday and the resistance point was under estimated by $2.10.  I sold futures at $274.40 against my $280.00 call options today because they expire on Friday of next week.  My intent was to protect the equity I have in this call option so it doesn't dwindle into next week.  Now the call was out of the money so the equity was all time value however I didn't like the way the market looked therefore I sold the futures and missed taking profit by $.10 today as I had an order to exit the short futures at $268.10.

Bottom line - I am looking for continued weakness in May '09 meal tonight/tomorrow but I think we will see an early low and late high.  We are having a tough time closing above $271.00 to get anything going to the upside.  Support for May '09 meal should be $268.20, $267.20 and then $265.10.  Resistance should be $271.20, $272.10 and then $273.00.  I expect early lows and late highs tomorrow.

HOGS - June '09 GLOBEX
Open - $72.05, High - $72.65, Low - $71.70, Close - $72.40 Up $.70
As a review, yesterday I said "I am looking for continued downside tomorrow with pressure more than likely mounting.  We closed below my support area of $71.90 today and if we continue to close below it we should test $69.525 in short order.  If we test and close below $69.52 then ouch, another leg lower is possible.  Support for tomorrow is $71.35 then $69.525 and resistance is $72.425 then $72.62 then today's high of $73.25.  I expect a weak day of trade tomorrow with the majority of negativity coming early in the day as the charts look like we could find support later in the session. "

June '09 hogs didn't get to my support number of $71.35 today but it did reach my second resistance point of $72.62 ($72.67 was the high) which I sold against.  I added to my short position today as I see this bounce as a gift.  My work from 2000 to 2008 shows that June futures decline 67% of the time from March 15th to April 1st on average of $2.83 cwt and the other 33% of the time they increase on average of $3.02 cwt.  

Bottom line - with packer margins still in the red I continue to have a negative bias toward the market because today's action didn't tell me much from a chart perspective.  We closed back above the $71.90 number I spoke of yesterday so we need to continue to watch this level to give us further direction.  Cutout was up $.98 today and it was up $.82 yesterday so we've had back to back days of higher cutout numbers which will be psychologically supportive to the market.  I look for early strength in the market based off of tonight's cutout number but I believe we will have early highs and late lows.  Support for June '09 should be $72.175, $71.70 then $71.47.  Resistance should be $72.675 then $73.25.  I am still not friendly hogs at these levels and I have a cycle high being put in tomorrow and then a lower trend into approximately March 27th.  Again I'm looking for early highs and late lows tomorrow.

NW_LS500
Des Moines, IA     Wed, Mar 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 mostly
steady; butts steady to 1.00 higher; sknd hams 17-20 lbs steady, 20-23 lbs weak,
23-27 lbs not tested; sdls bellies 14-16 lbs 2.00 higher; lean trimmings not
tested. Trading slow, with light to mostly moderate demand and light to
moderate offerings.


-----------------------------------------------------------------
Loads PORK CUTS          :             74.38
Loads TRIM/PROCESS PORK  :               4.0
-----------------------------------------------------------------

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
-----------------------------------------------------------------------
03/11        78.4      57.08   73.68   63.71  32.32  97.00 40.07  75.68
Change :                0.98    1.77    0.02   1.33   0.08  0.82   1.10
-----------------------------------------------------------------------

USDA cash reports were delayed today due to packer submission problems so

please use the link below to check for the updated cash prices.

USDA Hog Price Comparison

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 - $3.64 1/2, High - $3.84, Low - $3.64 1/4, Close - $3.75 1/2 Up $.10
I said yesterday "I am looking for May '09 corn to open unchanged to lower tonight based on follow through from the close today.  I see support at $3.64, $3.62 1/2 and then $3.58, I see resistance at $3.67 then $3.70.  I am expecting early follow through weakness tonight and MAYBE tomorrow morning but I am looking for an early low and a late high tomorrow.  We need a close above $3.68 to gain more strength for a run at the upside but for now I believe selling will surface just below today's low."

My first level support point was almost right on today but I was only off on resistance by $.14!  I expected to see a small correction before we made a move like we had today but obviously that wasn't the case.  The stock market helped get things going this morning because Citibank stated it had a profitable first two months of 2009 which is the best they've had since the third quarter of 2007; Wells Fargo made a similar comment last Friday.  This got stocks moving higher in pre-market and then the Government stated they would bring back the "up tick rule" in the stock market which sent the Dow Jones above 300 points higher.  They also made a comment that they will review mark to market accounting.

Bottom line - I am still looking for a place to buy May '09 corn against $3.60 put options as the market didn't get to my target levels over the past couple of days.  We have now traded substantially above the downtrend line in the May '09 contract and I look for a close above $3.68 for a couple of days before getting extremely excited about a major rally.  Support for tomorrow is $3.74 $3.71 3/4, $3.69 and resistance should be $3.81 1/4 and then $3.84.  The market created a sell signal at $3.79 1/2 in the May '09 contract today with a protective buy stop at $3.85. 

MEAL - May '09 Electronic
Open - $265.00, High - $273.90, Low - $264.40, Close - $271.30 Up $6.30
Reviewing yesterday's comments I said " I am looking for an early low and late high tomorrow with support at $264.50 and $263.10 and resistance to be $267.50 and $270.50.  I am still in the camp of soybean meal looking for a bottom therefore I have call options in place to give us upside protection in the event of a rally.  I want upside protection at these levels but I want known risk thus the use of options."

I was very close with my first level of support in May '09 meal but like corn I was off on my resistance number but not near as bad as I was in corn.  I have been saying I am looking for the market to bottom in here but we have failed to get any type of rally going that is sustainable.  Today we closed above a key level of resistance of $270.50 which is the 62% retracement level back to the contract low.  A close above this level looks positive but we need more than just one, I would like to see follow through to the upside tomorrow and another close above $270.50 before I get very excited about rally attempts.

Bottom line - I am looking for tonight/tomorrow's trade to open on weaker tone and test support at $269.20 to $268.00 before finding support.  As I said above we need to see the market continue to close above $270.50 before I think we can make a bigger move higher.  If you don't have upside protection in place I would make sure you visit with someone who can help you with this need.  Support for tomorrow is $269.20, $268.00 then $264.40 and resistance is $272.30 and $273.90. 

HOGS - June '09 GLOBEX
Open - $73.00, High - $73.25, Low - $71.60, Close - $71.70 Down $1.50
As a review from yesterday I said "I am looking for the June '09 hogs to test $72.37 with an ultimate test of $71.90.  If we close below $71.90 for a couple of days then I would expect a test of $71.30 to $69.55 area.  I see June '09 trading lower tomorrow in the early stages of the day and possibly finding support later in the session however I think any rally we have tomorrow will be sold by professional traders.  I don't like the market here unless we start to see big moves to the upside in the cutout numbers.  Support for tomorrow is $72.37 and $71.90 where resistance is at $73.60, $73.77 and then $74.30 although I don't think it is likely we will see the topside of resistance tomorrow.  Today looked pretty ugly on the charts (in my opinion)."

Not much has changed from what I said yesterday or late last week, I am not short-term friendly June '09 hogs at these prices until something significant changes with cutout.  Packer margins are still in the red and it business principles would suggest you can't slaughter hogs at a loss for an extended period of time, something has to give.  Again, my decisions are based on chart action with followed by an awareness of fundamental information so I am more concerned with the way the chart looks than anything.

Bottom line - I am looking for continued downside tomorrow with pressure more than likely mounting.  We closed below my support area of $71.90 today and if we continue to close below it we should test $69.525 in short order.  If we test and close below $69.52 then ouch, another leg lower is possible.  Support for tomorrow is $71.35 then $69.525 and resistance is $72.425 then $72.62 then today's high of $73.25.  I expect a weak day of trade tomorrow with the majority of negativity coming early in the day as the charts look like we could find support later in the session. 

I had to post these comments prior to the cash and cutout information release by the USDA this afternoon, my apologies.  Below are the links to the USDA site to get this information.

Pork Cutout  

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 - $3.65 3/4, High - $3.70, Low - $3.64 3/4, Close - $3.65 1/2 Up $.04
Due to time constraints today my comments will be short and sweet but the balance of the week looks good for posting comments.  I don't have anything to review from Friday because I didn't have any comments therefore I will start from scratch today.  There has been small volume in May '09 corn over the last few sessions which leads me to believe there isn't much behind this little rally we are getting.  I am not suggesting you sell everything in sight all I mean is I think we could see another correction lower prior to making new highs above $3.80 1/2. 

I exited long futures last week on Wednesday I believe and I am look for a place to re-own futures against my long $3.60 April puts to turn them into calls.  I am not a big fan of flat out ownership of corn at this point until I see better indications of a bottom from the chart.  We are still using the downtrend line from the January high as resistance.  We need to close above that level ($3.68) for a few days for me to get excited about an upside move.

Bottom line - I am looking for May '09 corn to open unchanged to lower tonight based on follow through from the close today.  I see support at $3.64, $3.62 1/2 and then $3.58, I see resistance at $3.67 then $3.70.  I am expecting early follow through weakness tonight and MAYBE tomorrow morning but I am looking for an early low and a late high tomorrow.  We need a close above $3.68 to gain more strength for a run at the upside but for now I believe selling will surface just below today's low.

MEAL - May '09 Electronic
Open - $267.70, High - $270.50, Low - $264.80, Close - $265.00 Down $.30
May '09 meal had a relatively quiet day and closing near unchanged.  Looking at the intra-day charts I feel we could see unchanged to lower tonight as the market opens.  I believe we will test $264.50 and POSSIBLY $263.10 before finding support.  I look for May '09 meal to have an early low and a late high during tomorrow's trade similar to corn.

Bottom line -  I am looking for an early low and late high tomorrow with support at $264.50 and $263.10 and resistance to be $267.50 and $270.50.  I am still in the camp of soybean meal looking for a bottom therefore I have call options in place to give us upside protection in the event of a rally.  I want upside protection at these levels but I want known risk thus the use of options.

HOGS - June '09 GLOBEX
Open - $73.15, High - $74.30, Low - $72.95, Close - $73.20 Down $.525
June '09 hogs moved higher right after the open of trade today.  I sold hogs on Wednesday or Thursday of last week around $73.05 for a hedge based on the way the market looks and feels at this point.  I am not ruling out the fact that we can't move higher at some point but I think we need a setback first.  The packer margin is awfully red so something needs to happen, either cash come down or cutout comes up.  So far the cutout isn't doing its part to solve the margin problem.  The assumptions I make about packer margins are based on information I have and is not from the packers themselves therefore I can't guarantee its accuracy.

I am looking for continued weakness tomorrow based on how the charts look.  The last commentary I had last week said I was looking for hogs to have a downside reversal on Thursday which was on target in the morning but closed higher on the day.  I am standing by my comments and continue to believe we should see a setback in the June '09 hogs before going much higher.  

Bottom line - I am looking for the June '09 hogs to test $72.37 with an ultimate test of $71.90.  If we close below $71.90 for a couple of days then I would expect a test of $71.30 to $69.55 area.  I see June '09 trading lower tomorrow in the early stages of the day and possibly finding support later in the session however I think any rally we have tomorrow will be sold by professional traders.  I don't like the market here unless we start to see big moves to the upside in the cutout numbers.  Support for tomorrow is $72.37 and $71.90 where resistance is at $73.60, $73.77 and then $74.30 although I don't think it is likely we will see the topside of resistance tomorrow.  Today looked pretty ugly on the charts (in my opinion).

I had to post these comments prior to the cash and cutout information release by the USDA this afternoon, my apologies.  Below are the links to the USDA site to get this information.

Pork Cutout  

USDA Hog Price Comparison 

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.

NW_LS500
Des Moines, IA     Wed, Mar 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 firm; sknd hams 20-23 lbs 4.00-5.00 higher, 23-27 lbs 1.00 higher on a
light test; sdls bellies 14-16 lbs steady; lean trimmings unevenly steady.
Trading slow to moderate, with light to moderate demand and offerings.



-----------------------------------------------------------------
Loads PORK CUTS          :             75.63
Loads TRIM/PROCESS PORK  :              41.0
-----------------------------------------------------------------

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
-----------------------------------------------------------------------
03/04       116.6      56.26   73.65   61.39  35.17  97.93 39.09  71.30
Change :               -0.66    1.32    1.63  -5.03  -0.50 -2.42   0.01
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Wed, Mar 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 :  1.76 hgr   :  2.25 hgr   :  1.88 hgr   :  1.47 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 47.00-62.00 : 47.00-62.00 : 47.00-62.00 : 47.00-61.00
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    57.76    :    59.13    :    59.00    :    54.90
--------------------------------------------------------------------------
Head Count      :   31,114    :   16,963    :   21,688    :    9,426
==========================================================================

CORN - May '09 Electronic
Open - $3.57 1/4, High - $3.62 3/4, Low - $3.44 1/2 Close - $3.50 1/4 Down $.08 3/4
May '09 corn did what everything else was doing today, moving lower.  I had support last week at $3.59 1/4 where I purchased futures ($3.60 actually) against $3.60 May'09 call options to get further coverage in place after taking some equity out of the market the day before.  I have around 25% exposure to the downside that has unknown risk however all of my other positions have a know risk factor.

As I watched the May '09 corn contract sink lower and lower today it did find some support around $3.45 1/2.  The market made its big move during the first hour of trade then had $.01 1/2 worth of follow through to the downside during the second hour and the third hour was looking for a retracement of the earlier downside move.  It is hard to have a friendly tone to the market now that we have pierced the $3.50 1/2 support level in the May '09 contract.  Last Friday's close below $3.63 wasn't the best Weekly close we could've had.  A close below $3.63 on a consistent basis would project another test of the contract low of $3.15 3/4 set on 12-05-08.  

Bottom line - today's action is piggy backed on the decline of the Dow Jones making its lowest low since 1997 by the help of our friends at AIG needing more taxpayer money.  The Dow Jones aside I am looking for an early low tomorrow and firm as we move forward into the day.  I think it is safe to say we should see a test of today's low of $3.44 1/2 and then attempt to rally toward $3.50 3/4.  Support for tomorrow in the May '09 contract is $3.44 1/2 then small support at $3.37 1/2 and resistance should be $3.50 3/4 then $3.52 1/4.  I am looking for some turn around Tuesday action tomorrow.

MEAL - May '09 Electronic
Open - $267.50, High - $269.30, Low - $259.50, Close - $260.80 Down $9.00
May '09 meal wasn't anything special today as it followed the same trade tendencies as the rest of the Ag commodities.  I have a cycle low in place on May '09 meal as of last Thursday but that doesn't mean the cycle is that exact low; it makes a projection in the area of the low.  Looking at today's trade we see some signs of a possible recovery tomorrow.  The troubling part of this cycle low is the market has now closed below $270.70 for three straight days and that would suggest a test of the contract low at $237.00.   I have call option positions in place where I know my risk and will continue to use this strategy until I see signs that would suggest otherwise.

Bottom line - I see May meal opening lower tonight on follow through weakness and then finding support and firming from there.  Again, similar to corn I believe the Dow Jones is going to have some effect on tonight's open for the Ag sector.  I see tomorrow having an early low and a late high looking for a turnaround Tuesday type action.  Support is $259.50 then $255.30 and resistance is $263.90 then $265.20.  I am looking for an early low and late high tomorrow but it all depends on how the Dow Jones reacts tomorrow.

HOGS - April '09 GLOBEX
Open - $60.925, High - $60.975, Low - $59.825, Close - $60.275 Down $.625 
April '09 hogs retraced some of its gains from last week today closing $.625 lower on the day.  Morning cash bids were up nicely according to the USDA but with the outside markets in the crapper it was hard to get anything going to the upside.  Also some of the cash optimism was factored into last week's trade.

The market action in the April '09 contract was just a pause to make a move higher in the future.  We bounced off of the 50% retracement level of Friday's price range ($59.825) and closed above it.  With this being said it looks as if the market wants to make another run at Friday's high of $61.075 at some point in the near future.  June '09 is also holding above $71.175 which is the 50% retracement level back to the $69.62 low prior to our rally.  As long as we hold $71.175 the market is still poised to test the most recent high of $72.75 at some point in the near future. 

Bottom line - I am looking for some early weakness tonight/tomorrow and test the $59.82 level in the April '09 and also the $71.175 level in the June '09 contract.  Cutout was mildly lower tonight only down $.13 but we sure could have used some positive news in what seems to be a huge bear blanket surrounding the markets today.  I expect some recovery for the hog sector tomorrow along with the grains with projections of early lows and late highs.  April '09 support for tomorrow is $59.825 then $59.55 and if we get bearish then $58.60, resistance is at $60.45 then $61.075-$61.275.  June '09 support is $71.175 then $70.825 while resistance should be $71.925-$72.125 then $72.75.  I don't think the high end of my resistance levels for either April '09 or June '09 are attainable tomorrow unless we get major rallies in other markets.

NW_LS500
Des Moines, IA     Mon, Mar 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, sknd hams, and sdls bellies steady; lean trimmings firm. Trading slow,
with light to moderate demand and mostly moderate offerings.




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Loads PORK CUTS          :             52.38
Loads TRIM/PROCESS PORK  :               6.0
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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
-----------------------------------------------------------------------
         Total                   Today's Primal Cutout Values
Date     Loads      Carcass    Loin    Butt   Pic     Rib   Ham  Belly
-----------------------------------------------------------------------
03/02        58.4      56.22   70.76   60.01  40.12  98.00 40.32  71.26
Change :               -0.13   -0.36    0.26   0.00  -0.16 -0.25    unc
-----------------------------------------------------------------------

NW_LS831
Des Moines, IA     Mon, Mar 02, 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 :  1.32 hgr   :   .13 hgr   :   .88 hgr   :   .67 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 46.00-59.00 : 46.00-59.00 : 46.00-59.00 : 46.00-59.00
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    55.22    :    55.44    :    56.19    :    52.63
--------------------------------------------------------------------------
Head Count      :   24,537    :   11,776    :   17,344    :    6,489
==========================================================================

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.