CORN
If you are having a hard time viewing the charts that I post, all you have to do is click on them to make them larger. Corn FINALLY closed a day above the previous days high which was $6.10 on yesterday's Dec '08 corn close. I am still staying with my thoughts from yesterday that I believe that any rallies we get the market should be met with selling. The numbers I gave yesterday are $6.22, $6.53 and $6.81 all in the Dec '08 contract. The market settled today at $6.13 1/2 and I would expect some buy stops to be triggered tonight and have the market up harder early tonight rather than later. We are not far away from my first target of $6.22 and it sounds as though the Government will not allow CRP acres to come out early this year (released at 1:45 p.m. central time). This news is viewed as bullish but I look at it as big whoop, this story is just something to stick a price rally to. The market is/was severely oversold and needed a recovery. I expect the markets to open better tonight and trade better through tomorrow but again I would expect to see resistance at $6.22 if we can get that high. My strongest resistance number is $6.80 in the Dec '08 contract, that is 50% retracement back to the $7.99 1/4 high we had in late June. Keep protecting feed needs in here!
MEAL
Meal broke early with soybeans and corn for that matter early this morning but mounded a little comeback toward the end of the day. Soybeans and wheat were the weakest link today by far, then meal and finally corn as the leader. I bought meal in Sep when it was down approximately $1.80 and sold it off around up $1.80. I had orders in to sell up at $375.00 but of course the market topped at $374.80, lucky me. I still don't think meal has major upside potential at this point but I don't think it is going to fall out of bed either. I believe meal is going to establish a range and trade within it until the crop report in August. Corn and soybeans feel as if they should be in the same boat. I expect early highs in meal tomorrow (or tonight) and then drift lower as the day proceeds. Again, I will look to buy dips in meal and I will also get long if the market acts in a way that isn't in line with the movement I expect. Keep protecting the upside in meal.
HOGS
Hogs took it on the chin today! The Oct contract was $2.00 lower at one point during the day but managed to rally back and close down $1.10 on the day. Oct '08 hogs touched its 50% retracement level of $71.35 today and bounced off of it. I would expect today's low to be support tomorrow. The market should test this low again to see if it will hold and if it doesn't then we could see $70.65 and then down to the low of $68.25. $72.45 should provide as resistance tomorrow but if we can continually trade above it tomorrow then we try to get up to today's high of $73.75. My feeling is still heavy on the hog market, I think we are living on borrowed time in the cash market. Again as I have said several times this past week; August 4th was the top of last years rally and then it was all downhill from there. I am not making that prediction as much as I am keeping it in mind. I expect a test of today's lows tomorrow.
USDA ESTIMATED PORK CARCASS CUTOUTHurley & 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.
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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07/29 74.9 85.87 100.12 90.80 68.16 96.15 86.18 94.50
Change : 0.57 -0.41 0.11 -0.04 -0.87 -0.16 4.93
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 : .53 lwr : .65 lwr : .75 lwr : .23 lwr
Negotiated : : : :
CARCASS BASIS : 72.25-82.10 : 73.00-82.10 : 73.00-82.10 : 72.25-80.00
185 lb Base Hog : wtd avg : wtd avg : wtd avg : wtd avg
Plant Delivered : 79.41 : 79.90 : 80.00 : 77.93
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