April 2011 Archive for The Lean Hog Perspective

Corn – July ’11 corn is looking for some direction and higher looks like the direction it wants to move.  I don’t think we are going to see fireworks to the upside just yet but if the weather stays cool and wet and prevents planting of the much needed corn acres we could see the market add more premium to the old crop.  Corn is only 7% planted and it sounds like we won’t get much accomplished this week either.

I’m of the opinion corn is going to work its way higher or at minimum be supported until planting progress reaches 50-75% complete.  By then the trade  should begin to assume the crop is going to get planted okay.  Then we move on to growing conditions and weather (still).  It is going to be a rocky road this summer so try to use known risk strategies to protect feed needs!

Bottom Line – I’m looking for an early low and late high tomorrow.

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Meal – July ’11 meal is searching for a bottom and as we hold support just above the $343.00 area.  I’m looking for a sideway’s market for a bit with a slight tilt to the upside.  Right now the challenge to the upside would be to get above $356.30 and close there otherwise we should stay sideway’s.

Bottom Line – I’m looking for an early low tomorrow.

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Hogs – June ’11 hogs had a good day as we managed to close higher with our strength coming in and after the pit close of 1:00 p.m. central.  The June hogs need to get above $102.45 and hold it as support then we can look to $103.00 and ultimately our contract high of $104.35.  I’m of the opinion that the futures market wants to move higher from here but the cash market is lagging.  The basis levels are outrageous!  Either cash needs to climb or May futures are waaaay too rich.

My opinion is that cash should continue to firm over the coming weeks.  This week is the exception because of the shortened week due to Easter.  The June ’11 contract is making a wedging pattern which suggests a significant breakout in one direction or the other.  To me the breakout looks to be favoring the upside if we get one but it is a signal that the market should make a big move soon.

Bottom Line – I’m looking for an early low in the June ’11 hog contract for tomorrow.

• [500] – Pork Cutout
• [501] – Noon Cutout
• [710] – Estimated Slaughter
• [831] – Cash Summary P.M.
• [711] – Actual Slaughter
  • Livestock & Feed Outlook
  • Monthly Cold Storage
  • Quarterly Hog & Pig Report

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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.

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Corn – May ’11 hasn’t looked back since last Thursday’s stocks report.  I have to say I was looking for a pull back today but the market just laughed at me.  There was good volume again today as the May ’11 futures closed up $.24 1/4 on the day.  I think one of these days we should see an intra-day pull back but by the looks of it any pull back would be bought.  $8.00 futures looks to be the next likely target for May ’11 corn.

Bottom Line – I’m looking for an early low and late high tomorrow.

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Meal – I have to say I’m surprised at the action we’ve had in May ’11 meal.  We are still holding the support levels of $356.30 but if the market doesn’t hold support at $352.30 then we possibly drop back to $339.40.  Like corn, I think any breaks in the meal market will be bought.

Bottom Line – Based on today’s action I’m looking for an early low tomorrow.

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Hogs – June ’11 hogs closed higher today after starting out softer.  The cash market didn’t do much today but didn’t fall out of bed either.  The cutout was $.18 higher which isn’t any big deal either other than the fact it wasn’t lower on the day.  Longer-term thought for June ’11 hogs is still higher even though we had a warning sign on our weekly chart last week.  I will monitor this sign to see if it may lead somewhere  but after today’s rally on the close I think it is evident that hogs are firm.

Don’t get complacent, make sure you make business decisions!  If you sell hogs, buy your corn and meal.  Don’t mess around with this volatility in the market.  If you have a contracted in price for your pigs at a reasonable price you should be making excellent profits right now even with corn and meal at current levels.  The stocks report last week is looking to take prices high enough to ration usage so to me that means the profit margin in hogs probably will not grow as fast in the front months as it will in the back months.

Bottom Line – I’m looking for an early high in the JUNE ’11 hog contract for tomorrow.

• [500] – Pork Cutout
• [501] – Noon Cutout
• [710] – Estimated Slaughter
• [831] – Cash Summary P.M.
• [711] – Actual Slaughter
  • Livestock & Feed Outlook
  • Monthly Cold Storage
  • Quarterly Hog & Pig Report

_____________________________________________________________

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.