OUR SITE HAS MOVED TO A NEW LOCATION!

THIS SITE HAS OFFICIALLY MOVED TO WWW.LEANHOG.NET. ALL FUTURE POSTS WILL BE POSTED ON WWW.LEANHOG.NET. PLEASE CLICK HERE TO GO TO OUR NEW SITE.

WE HAVE MADE MANY CHANGES TO THE FORMAT, LOOK AND FEEL AND CONTENT OF OUR NEW SITE SO PLEASE TAKE THE TIME TO CHECK IT OUT, I THINK YOU WILL ENJOY IT. THANK YOU!

Jeremy Knutson


Monday, August 11, 2008

Hog Comments - 08-11-08 Hogs are being shy and grains rebound.

Please be patient with me as I have meetings most of the week so my posting times will vary, such as tonight.  There may even be days that I don't make a post but I will try my best to make sure I get it done.  Thank you for continuing to read my blog.
 
CORN
Corn traded higher for part of the day but failed to close the market higher.  Corn trade struggled vs. soybeans and meal today.  So far the Dec '08 contract has been holding support around the $5.13 area but if the USDA report is negative tomorrow and we violate the $5.12 low from last night and close below it, we could see a test of the January low of $4.83 3/4.  Again, I am not excited about corn until we close the day above a previous day's high.  The opening tonight is primed for follow through to the downside.  All bets are off with the USDA report tomorrow.  I don't think we should expect any major surprises but who knows, right?  I am structured to participate in a move higher if the market should view tomorrow's report as bullish, and I am also open to the downside should we continue our slide.  The one thing that I would not want tomorrow is a big opening to the downside, that is usually an opportunity to buy the market.  We will see.
MEAL
Meal was strong for most of the day today, maybe the market thinks we've overdone it to the downside?  Again technically I don't see anything to get excited about just yet.  Like corn, I need to see the market close above a previous day's high before I want to get aggressive on the buy side through futures or cash.  The USDA report tomorrow should give us some direction in the morning. I really have no predictions other than momentum has us moving lower at this point.  
HOGS
Hogs had very quiet trade this morning, trading both sides of unchanged for a couple of hours.  The morning cash report came out around 11:00 a.m. central, which was lower for morning cash bids.  Sources tell me that cash is still strong, but I do have reports of the cash market beginning to slow some toward the end of the week.  I said on Friday that I was hedged and was going to stay that way as I have been seeing warning signs on the daily chart.  I still feel like I need to be hedged in the Oct '08 contract.  Today was the first day since July 29th, 2008 that we have closed the day below a previous day's low.  I said on Friday that we should see some sell stops today below Friday's low of $77.40, and we did end up making new lows at the end of the day.  $77.10 was our low today.  I would expect a better opening tomorrow, which would be a good opening for follow through to the downside.  I think there is more going on behind the scenes in the hog market because Thursday and Friday both had good cutout and cash numbers but the market has really failed to react positively to them.  I could be wrong but I am getting more and more bearish Oct '08 hogs here.  If you're not hedged, I would strongly consider speaking with your broker about hedging something up here.

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
-----------------------------------------------------------------------
08/11        42.8      92.91  113.81  100.40  73.73  98.84 89.53  99.72
Change :                0.59    1.73    1.22  -0.43  -0.72  0.43    unc
-----------------------------------------------------------------------
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 :   .32 lwr   :   .30 lwr   :   .06 lwr   :   .29 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 76.00-92.00 : 80.00-92.00 : 80.00-92.00 : 76.00-91.00
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    87.13    :    88.31    :    88.39    :    85.73
--------------------------------------------------------------------------
Head Count      :   25,155    :    9,241    :   13,121    :   11,915
==========================================================================


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.

No comments: