**Disclaimer - it has been a long last couple days so forgive me if my comments are rather short. I should be back on my regular schedule next week with MAYBE the exception on Wednesday. Thanks for reading and let me know if you have suggestions.
Dec '08 Corn Daily Chart
CORN Dec '08 corn had an interesting day because we were down around .02 cents at 11:30 p.m. cst last night when I checked the markets and closed the overnight session .07 1/2 lower. We traded as low as $5.81 1/4 which is a support number I talked about in yesterday's comments. I exited my short "delta hedge" futures today at $5.84 1/2 because the market seemed like it wanted to hold the $5.81 support area. I am now long my original long $5.35 call and short $6.10 call spread in the Oct and Dec '08 contract. I will make a judgment call on corn tomorrow on whether or not I will "delta hedge" again because of the long weekend. The weather isn't viewed to be a major threat and it isn't extremely bullish either so I am not sure how people will want to position going into a three-day weekend.
It feels like the market may want to be mixed with a stronger tone tomorrow going into the long weekend. I expect the markets to chop around tomorrow and get very volatile around 1:00 p.m. CST going into the close. I am looking for some short-covering action tomorrow.
Dec '08 Meal Daily Chart
MEAL Soybean meal followed soybeans lower this morning out of the gate but also recovered with sobyeans. I tried to buy Dec '08 meal at $356.50 and only got filled on 5% of my order that I placed. I usually don't trade during the first hour of the market session because that is how I get a feel for direction for the rest of the day so you will notice the low for the day was $354.70 but I placed my orders after the low was made.
I expect the Dec '08 meal to have some short covering as well tomorrow. We could be mixed because I see tomorrow as such a wild card day that is hard to predict given the long weekend. My feeling is mixed to up on the intra-day chart but I look at the daily chart and it doesn't suggest anything major to the upside. We are still moving lower in my opinion until we close higher than a prior day high.
Oct '08 Hogs Daily Chart
HOGS Oct '08 actually held together pretty well today only moving $1.975 lower and not getting move over $2.00 lower at any given point today. We have nailed the $68.25 support level in the electronic hogs that I mentioned in Monday, August 25th's posting. We reached $68.25 in the overnight session tonight and I would expect the market to hold this level tomorrow as we are coming up on the Labor Day weekend and we put some pretty good hurt on the futures this week. If we close below $68.25 tomorrow then $65.40 is next in line for a target. I will be interested to see what cash and cutout do tomorrow with most packers out of the market.
I look for two sided trade tomorrow with the thought we could find bottom pickers trying to support the market and buying. As I write this we are currently trading .22 higher in Oct '08 hogs in overnight trade. If you want to see what overnight or the day session is doing in the Globex or electronic trade, the CME has free real-time quotes that you can log on and use. Click on this link to go to the CME website to get setup and again IT IS FREE. CME E-Livestock Real-time Quotes You will need to enter an email address and maybe a password or something but the registration is very simple and you only need to do it once. They will not call you and try to sell you something either, the free quotes are an attempt to get people to look at and use the electronic platform and increase the trade liquidity.
Cash and cutout was lower today again, cash down around $3.50 and cutout down around $1.25. I hope you have a safe and wonderful Labor Day weekend and I will post comments again starting next Tuesday. Thanks again for reading and PLEASE if there is anything else that you would like to see on this blog please email me. I want this to be as useful and informational as possible.
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
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Total Today's Primal Cutout Values
Date Loads Carcass Loin Butt Pic Rib Ham Belly
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08/28 102.4 80.51 101.47 86.92 66.42 96.87 74.70 79.43
Change : -1.23 -2.06 2.47 -0.26 -1.11 -1.55 -3.00
-----------------------------------------------------------------------National Direct Hog Price Comparison
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: National : Iowa : Western : Eastern
: : Minnesota : Cornbelt : Cornbelt
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Base Price is the price from which no discounts are subtracted and
no premiums are added.
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BARROWS & GILTS : 3.20 lwr : 3.24 lwr : 3.19 lwr : 2.78 lwr
Negotiated : : : :
CARCASS BASIS : 67.00-75.99 : 67.00-74.66 : 67.00-74.66 : 67.25-75.99
185 lb Base Hog : wtd avg : wtd avg : wtd avg : wtd avg
Plant Delivered : 71.36 : 70.73 : 70.97 : 72.48
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Head Count : 21,739 : 9,414 : 12,669 : 7,550
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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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