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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 04/22/09 - Pork cutout can't catch a break lately.

Apr 22, 2009

Hog & Corn Comments 04/22/09 - Pork cutout can’t catch a break lately.


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

CORN - May ‘09 Electronic
Open - $3.74 1/2, High - $3.78 1/4, Low - $3.70, Close - $3.73 1/2 Down $.00 1/2.

Thoughts - Long Term (6 months) - Bullish/Higher
Yesterday I said: As mentioned I am not bearish at these levels give the decline we've had.  Today was actually a pretty quiet day as it relates to volume so I'm not buying into this rally attempt.  As of right now I am keeping my options open to purchase corn at a lower level with a preference of $3.67 1/2 if I can.  I will be looking for this number tomorrow as I think the market has potential get near it tomorrow.

May ‘09 corn: $3.76 seems to be the golden number that May '09 corn can't seem to get through and close above.  May is range bound between the 50% and 62% retracement level back to the early March '09 low.  As I have said in some of my more recent posts I have a cycle low due near the 29th of April and I will hold a skeptical attitude toward corn until then and review then.  I am still looking to buy corn at $3.67 1/2 if I can.

Bottom line: I am looking for the market to experience an early low and a late high tomorrow.  As I said I will continue to try and buy May '09 corn around $3.67 1/2.

May '09 Corn - Support/Resistance for 04-23-09
(R3) Resistance 3: $3.83 1/4
(R2) Resistance 2: $3.78
(R1) Resistance 1: $3.76
Today's close: $3.73 1/2
(S1) Support 1: $3.72
(S2) Support 2: $3.70
(S3) Support 3: $3.68 1/2

MEAL - May ‘09 Electronic
Open - $325.50, High - $329.80, Low - $324.30, Close - $329.80 Up $4.50
Thoughts - Long Term (6 months) - Bullish/Higher
I said: "I said it yesterday and I will say it again today; I am not willing to chase the meal market at these levels.  I have confidence in saying this because I have call spreads in lace to allow me to be wrong directionally but still keep business under control.  May '09 meal still needs to get back above $326.00 on a daily close before I think we can test our old high of $333.90 so that said, I will maintain my negative bias toward the meal market.

May ‘09 meal: I am surprised May '09 meal did what it did today; we sold off as the day was progressing but it came back strong into the close.  The overnight market set off an INTRA-DAY sell signal on the hourly chart (very short-term) at $328.20 with a protective buy stop at $330.50.  The important number to keep in mind right now is $326.00 as the market settled above it today and if it does again tomorrow then I would say a test of the most recent high of $333.90 is likely. 

Bottom line: I’m looking for the market to experience an early low and a late high tonight/tomorrow.

May '09 Meal - Support/Resistance for 04-23-09
(R3) Resistance 3: $341.00

(R2) Resistance 2: $333.90

(R1) Resistance 1: $331.00

Today's close: $329.80
(S1) Support 1: $3
(S2) Support 2: $326.00

(S3) Support 3: $324.10


HOGS - June ‘09 GLOBEX
Open - $72.75, High - $72.80, Low - $71.325, Close - $72.375 Down $.025
Thoughts - Long Term
(6 months) - Friendly
Yesterday I said: June really didn't do much today as we traded within yesterday's range and
failed to show anything of significance to change my mind on the market which is lower.  I need to see the
June '09 contract close above $72.75 for a couple days before I will say we could test $73.85 again.  I am still of the opinion the market has more downside for the time being. "

June ‘09 hogs: I am still looking for that close below $72.175 which looks like it should come tomorrow and then I would be looking for a test of $70.525.  My short-term target on June '09 hogs is $70.525 on gut feel but technically we need a couple of closes below $72.175.  I still have my cycle indicator saying we should stay weak into May 4th so I will remain hedged for now with my upside open until $80.00 if we should get that high.  Once we get closer to May 4th or reach some downside objectives ($69.525 in June '09) I may adjust my positions to become more of a bullish position meaning open the upside completely.  

Bottom line: I’m looking for the market to be lower tonight/tomorrow and experience an
early low and a late high and I'm staying hedged for now.  If we close below $72.175 tomorrow and Thursday then I am looking for a test of $70.52.

June '09 Hogs - Support/Resistance for 04-23-09
(R3) Resistance 3: $73.95
(R2) Resistance 2: $73.20
(R1) Resistance 1: $72.90
Today's close: $72.375
(S1) Support 1: $71.95
(S2) Support 2: $71.35
(S3) Support 3: $70.525

Click here to view cash and cutout reports

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

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