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The Lean Hog Perspective

RSS By: Jeremy Knutson

This lean hog and feed commentary contains thoughts from Jeremy Knutson, a commodity broker with Hurley & Associates.

Hog & Corn Comments - 02-03-09 - Hogs fake a selloff and rally into the close!

Feb 03, 2009

Hog Comments - 02-03-09 - Hogs fake a selloff and rally into the close!



If you have questions, comments or suggestions, contact me at 1-877-212-2564 or email me at jknutson@hurleyandassociates.comTo read what I was thinking at the highs and lows of the market go to  www.leanhog.net to view my archived posts.
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
--------------------------------------------------------------------------
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.


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