Hog Comments - 12-03-08 - Pork cutout comes in $1.32 higher!

CORN

I said yesterday I had a buy signal at $3.45 in the March '09 corn only if the market traded below $3.45 and then came back above it.  The signal is still good but we didn't get below $3.45 today because it was our low for today too.  This signal is on a daily chart and the only reason I am talking about it is because the market has good support around $3.40.

I would expect the market to test the $3.40 level at some point being we are so close to it.  We also have low volume to deal with because of the holiday's which makes for more volatile trade and can exaggerate moves in the markets.  Crude Oil was basically sideways today trading both sides of unchanged on the day.  The Dow Jones did the same thing, opened lower and then mounted a comeback to trade higher.


Bottom line - I am expecting a test of the $3.40ish area tonight/tomorrow and this will be influenced by the Dow Jones and Crude Oil.  I will still respect my buy signal at $3.45 1/2 stop if the market makes a low below $3.45.  If the order is filled an exit sell stop would be placed $.01 below the session low.  I am looking for sideways to lower trade tonight and tomorrow with the market looking for some direction from outside markets.

MEAL
As I said yesterday I think we can see the Jan '09 meal contract test the $238.80 level at some point in the near future.  I also said I thought we would take out yesterday's low before having a better day and we did just that.  The Jan '09 contract retraced 50% of today's range back to the $246.60 level and settled at $246.70.  If the market continues to maintain the $246.60 level then we could test today's high of $249.90 but if we fail then we are on to challenging our recent low of $243.20 and maybe even $238.80.

Bottom line - I expect meal to open better tonight in line with the strength from the Dow Jones going into its close.  I look for support at $246.60 but I think we can make another run at $243.20 either tonight or tomorrow at some point.  Don't get me wrong, I am not bearish at these levels but I think with the lack of volume we could see the market make some moves that it normally wouldn't in better volume trade.


HOGS
I got the number I have been looking for in the Feb '09 hogs, $64.32.  The market made a low at $64.05 in the pit and $64.12 in the Globex trade and closed at $64.37 which is above my number.  I would like to see the market close above this number tomorrow as well and begin a rally back to our most recent high of $67.05.  I feel as if we could see a rebound in the Feb '09 hogs tomorrow based on the setback we had today.  

The cutout number just showed up after I wrote the last paragraph and it solidifies my thought of the market being higher tomorrow because the cutout was up $1.32.  The Dec '08 and Feb '09 instantly rallied a few cents when the USDA released the number.  Cash was modestly lower today so packer margin had a nice gain today!


Bottom line - I said yesterday that I thought the market would test $64.32 before making another move higher and we have touched the $64.32 number and with the cutout number we had today I would expect this to be the beginning of a rally toward our most recent high of $67.05 in the Feb '09 contract.   I don't think we have enough momentum to do this tomorrow but I think it should happen over the next few days.

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
-----------------------------------------------------------------------
12/03        70.0      60.96   72.74   67.84  32.95  86.91 57.62  74.70
Change :                1.32    1.22   -1.09   0.28   0.10  4.45   0.01
-----------------------------------------------------------------------

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 :   .49 lwr   :   .83 lwr   :   .87 lwr   :   .10 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 46.00-58.00 : 46.00-58.00 : 46.00-58.00 : 50.00-55.41
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    53.95    :    53.82    :    53.93    :    53.99
--------------------------------------------------------------------------
Head Count      :   25,088    :   13,108    :   15,735    :    9,153
==========================================================================

 

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.

Hog Comments - 11-20-08 - Has anyone seen half of a nest egg? I can't find mine.

CORN

It didn't take long for March '09 corn to reach its low this morning.  The low was made during the first hour of trade and was $3.76 1/2.  I was impressed with the first hour trade making lows and then moving higher back toward the opening price of $3.83 1/2.   It ended up still being negative from a statistical perspective meaning  the futures should close below $3.83 1/2, which it did.

The volume today was light, around half of what it was during some of the "liquidation" days in October.  I think the March '09 corn has done enough to the downside for now.  We are still holding the resistance at $3.80 (from a close perspective) in the March contract.  Nothing new, the equity markets are in the toilet again today making new low's and then rallying only to sell off again.  Most of the action in the equity market hinged on congress deciding whether or not they are going to bailout the auto industry.  As of 1:54 p.m. CST they were not and the Dow Jones sold off.

Bottom line- I expect March '09 corn to open lower tonight and maybe make a jab at today's low of $3.76 1/2 but I think the weakness will be short lived in the overnight session.  We have a gap at $3.92 in the hourly chart that we need to fill at some point and I think we may have a chance at doing it over the next few days.  I expect an early low tomorrow and some short covering later in the day. 

MEAL

I said on Tuesday that the Dec '08 meal contract had a shot at touching $258.00 on this move before we reached good support.  Our low today was $256.80 so we are now in my support area, the question is will it hold.  We filled a gap on the hourly chart today that was made on October 22nd, 2008 at $256.90.  We have filled the gap and also come to a place where it looks like we have done enough to the downside for a bit.

Crude oil made a new low of $48.50 today which is the lowest level since the week of May 27th, 2005!  This new low and also crude trading around $3.00+ lower all day, helped keep the meal market lower.  The Dow Jones didn't help matters much either but meal didn't seem to pay as much attention to the Dow as it did Crude.

Bottom line - I feel the market should open weaker tonight and maybe move lower, but then recover as the evening session goes on.  I think tomorrow will have a low early in the day if not overnight and then firm as the day moves forward.   If the market makes another leg lower it should see support at $251.30 and then big support at $236.90, our most recent low.  $262.20 is a short-term resistance for tomorrow's trade if we trade higher like I think we could. 

HOGS

Hey- the market moved!  It is nice to see we still have activity in this market.  We had a nice little rally today in the Feb and April '09 futures which brings in a some optimism for the hog market in general.  I am going to start talking about the Feb '09 contract now because the Dec '08 isn't going to have as much activity any more as we close in on expiration in a few weeks.  It is my understanding that the hog market saw strength today because of cash and cutout optimism for the coming weeks.  I don't know how excited I want to get because the US Dollar Index is still toward its high but I have been getting warning signs (not sell signals, warning signs) of a top in the Dollar the past few weeks.

As of today's close we are trading above last week's high of $63.82 and we also traded below last week's low all in today's trade.  What does that say about how quiet the market has been?  We should have some resistance at $66.37 in the Feb '09 contract in the coming days and then up to $67.80.  I think we could set back slightly either tonight or tomorrow and test the $63.25-$63.70 area and find support.

Bottom line - I think we had good trade action today which will allow for some follow through buying tomorrow but I think we could test some support around $63.70 first before moving higher.  I expect an early low tomorrow and firming prices as the session moves forward.

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
-----------------------------------------------------------------------
11/20        59.0      56.67   71.21   64.34  41.04  86.36 43.51  67.00
Change :                0.23   -0.99    1.23  -0.06   0.66  0.13   0.17
-----------------------------------------------------------------------

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 :   .53 lwr   :   .21 lwr   :   .43 lwr   :   .28 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 40.50-51.50 : 40.50-51.50 : 40.50-51.50 : 42.00-51.35
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    49.45    :    50.24    :    50.27    :    48.20
--------------------------------------------------------------------------
Head Count      :   21,625    :    9,370    :   12,883    :    8,382
==========================================================================

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.

Hog Comments - 11-18-08 - Does the hog market still trade?

CORN

Corn had a pretty quiet day today all things considered.  I expected early lows today and late high's but there really wasn't a great deal of movement.  I said yesterday I thought we could test $3.78 either last night or today and our low was $3.78 1/2, which is close enough in my book.  I thought we were going to see more weakness in the overnight instead of in today's session.

I am still looking for lower prices tonight and into the first part of tomorrow's trade.  I wouldn't be surprised to see corn drop toward $3.75 and then down to the $3.71 area.  I don't expect a blow and go type trade but instead some weakness that drags us down to these levels.  The Dow Jones rallied and closed near its high today in its last hour of trade so it should bring some strength to the overnight grain markets on the open.

Bottom line - I expect Dec corn to be weak tonight and early tomorrow but I don't think we will get carried away to the downside.  I also think March '09 corn has a chance to see support at $3.95 and then $3.93.  My thoughts for the March '09 corn are a mirror of my comments on Dec '08, early low tomorrow and then move higher from there.  I think we have a reasonable shot at $3.93 but if we can't break $3.95 it might bounce at that level. 

MEAL

I said yesterday I expected a test of $267.40 and then $264.60 in the Dec '08 contract.  We made a low of $266.90 today and closed right at my number of $267.40.  I still think we will have a shot at the $264.60 number before we turn and move higher.  I think our high in the overnight will come early and we will have a late low by morning.  I think the day session for tomorrow will bring early lows and late highs.

Bottom line - I am not extremely bearish meal at this level but I am not immediately friendly either.  I think we have the chance to reach as low as $258 on this move before we find solid support.  I think tomorrow's low should be around $264.60 to maybe $262.00 in the Dec '08 contract.  Look for early lows and late highs tomorrow.

HOGS

I said yesterday I thought Dec '08 hogs could trade down to $54.87 and also that our low of $53.80 would probably hold as our contract low.  We only got as low as $55.05 (Globex) and had a very narrow trade range for the day.  It is almost as if people have started the Thanksgiving holiday early this year and there isn't anyone around to trade the market.

My views from yesterday haven't changed much, I still think the low for the Dec '08 contract are in and now it is a question of the Feb '09 contract and where it's headed.  From what I see the Feb '09 contract has support at the contract low of $60.50 and resistance at $63.82.  This support and resistance window is the area in which I think we could bounce around in for the time being until we get further direction.

Bottom line - I am looking at moving my futures positions from Dec '08 to Feb '09 in the near future but I haven't made the move just yet.  I will keep my hedges in the Dec '08 contract unless we get a close below $61.70 in the Feb '09 contract and then I will move them to the Feb '09 futures.  I expect lax although firm trade again tomorrow for the Dec '08 contract but the Feb '09 could have a bit more get up and go with the cutout being up $.99 today.  Resistance in Feb '09 hogs is $62.80 and then $63.05 for tomorrow's trade. 

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
-----------------------------------------------------------------------
11/18        83.4      56.70   73.25   62.83  41.39  86.49 43.54  63.63
Change :                0.99    0.48   -0.10   6.26   0.44  0.92  -0.37
-----------------------------------------------------------------------

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 :   .91 lwr   :   .57 lwr   :   .94 lwr   :   .06 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 39.00-54.25 : 39.00-54.25 : 39.00-54.25 : 44.00-50.68
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    50.45    :    51.68    :    51.64    :    48.47
--------------------------------------------------------------------------
Head Count      :   24,330    :   12,797    :   15,715    :    9,155
==========================================================================

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.

Hog Comments - 11-17-08 - Grains end the day higher but hogs are weak.

CORN

I'm back!  I apologize for not being able to post comments last week but I was traveling and it was difficult to find the proper time to complete the task.  Dec '08 corn had almost a $.30 range last week but only closed $.03 lower on Friday than where it opened on Monday.  The close for the week was $.04 3/4 higher than the previous Friday's close.  Sunday evening had a lower opening but through the market session last night and today we managed to close the market higher on the day.

I am not a bear at these levels and I think we have good support at the $3.75 level in Dec '08 corn but there is no rush to go out and buy corn as a long-term investment either.   We are still in the consolidation mode for the market and there are a lot of opinions being formed between $4.33 and $3.60 so which ever direction we break out of this range could provide for a nice move in the direction of the breakout.

  

Bottom line - I expect corn to be weaker early tomorrow and make early low's and late high's for the day.  I expect a test of $3.78 sometime tonight or during tomorrow's day session and then recover from those levels.  I expect this assuming the Dow Jones or Crude Oil doesn't have a meltdown.

MEAL

Dec '08 meal had a strong day today closing above Friday's high price of $269.20.  Like corn I am not a bear at these levels but I am not expecting a strong day tomorrow.  Crude Oil hasn't boosted soybean meal prices in recent weeks however Oil is getting close to an old low of $50.53 which was a technical target by some Wall Street analysts.  The most recent low is $54.67 and is only $4.14 away from the downside target of $50.53.

  

If crude oil holds the old low of $50.53 I think we could see a turn in the Soybean and meal market.  The U.S. Dollar Index is still toward the top end of its range but it looks to me like it is trying to find a top and poised to move lower in the coming months.  If this is the case we could see Crude Oil rally based on a falling dollar not to mention upcoming OPEC meetings to cut oil production.

Bottom line - I expect Dec '08 meal to be weaker tomorrow with an early low and late high.  Support tomorrow should be at $267.40 and then $264.60 but I would expect the low's for the electronic session to be set tonight instead of tomorrow.

  

HOGS

Dec '08 hogs had a very quiet day today with what seemed to be a lack of interest.  Nothing has really changed in the hog market for me other than we completed the Goldman Roll last week and cash has been steady according to the USDA.  I have short positions in the Dec '08 contract but will be rolling them to the Feb '09 soon as the Dec '08 contract will no longer be a good hedge location as we get closer to its expiration.

Bottom line - I expect weak trade again tomorrow but I don't expect a blow out to the downside.  I think it is even possible that our low might be in at $53.80 in the Dec '08 contract.  I think the market could trade down to $54.87 tomorrow and over the next couple days make a test of the low at $53.80.  I don't see a tremendous amount of downside in the Dec '08 contract at this point.

  

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
-----------------------------------------------------------------------
11/17        76.8      55.71   72.77   62.93  35.13  86.05 42.62  64.01
Change :               -0.70   -2.12    1.26  -0.19   0.69 -1.96  -0.32
-----------------------------------------------------------------------

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 :   .69 hgr   :   .64 hgr   :   .70 hgr   :   .03 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 41.00-54.05 : 41.00-54.05 : 41.00-54.05 : 46.32-53.38
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    51.08    :    52.19    :    52.48    :    48.41
--------------------------------------------------------------------------
Head Count      :   25,961    :   13,265    :   17,017    :    8,334
==========================================================================

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.

Hog Comments - 11-05-08 - You turn your head for one second...

CORN

Dec '08 corn opened slightly higher today and traded lower for the balance of the day.  The Crude Oil market didn't help matters as it was trading as much as $5.50 lower during the day.  Dec '08 filled a gap left on the hourly chart at $3.92 3/4 and also touched the 62% retracement level of $3.90 1/4 and held.    The Dow Jones continued its slide during the last hour of its session and the US Dollar index firmed going into 3:00 p.m. CST.

The market closed a 1/4 cent off of the lows today so we could experience a gap lower opening tonight which would actually be friendly.  If the market gaps lower and moves higher from there, I would expect some buying to come into the market above $3.90 in the Dec '08 contract.  Today I did some scale down buying of Dec '08 corn at $3.98 and $3.95 and my average price is $4.04 on about 60% of my needs.  I also purchased an out of the money put option to make sure the market can't blow up on me and get another sell off like we had in the last month. 

Bottom line - I expect the Dec '08 futures to gap open lower and move lower right away and then find support at $3.85 3/4 if we get down that far.  I expect the market to recover after the initial sell off and work its way back toward unchanged by tomorrow.  I expect early lows and late highs during tomorrow's trade.  It is probable that we may test the $4.03 which would be a 50% retracement of today's move.

MEAL

Dec '08 meal wasn't much different than corn or soybeans today as it too fell apart.  The meal market did what I thought it was going to do today; I expected an early high and a late low which is exactly what we got.  The Dec '08 contract touched support at $264.10 today which is the 50% retracement back to the low of $236.90 back on 10-16-08.  The market didn't bounce much off of this number but it did respect it for today's trading session; we will see what tonight/tomorrow brings.

Bottom line - I expect similar action in Dec '08 meal tonight as I do in the corn.  I am looking for a weak to possible gap lower tonight with some additional selling only to catch support at $261.40 if we get that low.  IF there is a gap lower (open below $263.40) and we end up trading above today's low I would expect some buying above $263.40.  I am looking for early lows tomorrow and late highs.  Make sure you have some soybean meal covered with options if you can!

HOGS

The market wasn't as weak in the Dec '08 contract as I thought it would be.  It seems to me the market is preparing for the Goldman roll which begins Friday.  I am not sure what I mean by that because if they wanted to go with the direction of the roll they would sell the Dec and buy the Feb but they are doing the opposite.  I am telling you, these Goldman guys are good at getting business done!

The cutout was down $3.53 yesterday but it didn't seem to bother the market in the Dec '08 but the Feb and April of '09 drifted some.  The cash and the cutout were down today as well.  I don't expect much to happen tomorrow either because the cash was no surprise and the cutout was expected to be lower  as well.  The weighted average for the nation is around $51.50 and the Dec '08 contract closed at $54.47 today so it looks as if the market thinks the cash will rally some into the Dec '08 contract expiration.  One could also view it as the futures market has more downside and that is the way I will keep positioned, covering the downside. 

Bottom line - I expect Dec '08 to be lower tomorrow based off of fundamental news this evening.  I don't think it will be a blood bath because the news isn't anything we didn't already know during the day session.  I look for quiet and mixed trade overnight and tomorrow I am looking for the market to make early lows and late highs unless the outside markets say something different.  With the Dow Jones closing 486 points lower and Crude Oil down $5.24 I think most traders will have one eye on the outside markets as well, and not only for hogs but grains too.

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
-----------------------------------------------------------------------
11/05       106.6      56.74   78.86   60.07  41.34  86.82 37.74  65.71
Change :               -0.81   -1.97    0.04   0.00  -0.48 -1.07    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 :  2.04 lwr   :  1.90 lwr   :  2.01 lwr   :  1.89 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 42.00-53.00 : 42.50-53.00 : 42.00-53.00 : 43.00-52.50
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    51.48    :    51.91    :    51.97    :    50.65
--------------------------------------------------------------------------
Head Count      :   21,781    :    8,924    :   13,604    :    7,927
==========================================================================

 

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.

Hog Comments - 11-04-08 - Grains rally but hogs can't find a leg to stand on.

CORN

As I said yesterday it felt as if the Dec '08 corn contract was going to firm up during today's trade session.  The first hour trade was positive for the Dec '08 contract even after the fact we gapped higher from yesterday on the intra-day charts.  Usually when we get gap openings either up or down, it is a signal of excitement that either continues or reverses.  Usually the market will reverse a gap opening just to fill the gap it left but today that wasn't the case, it kept going.

We traded above my high end resistance number of $4.18 that I talked about yesterday but failed to close above it.  The grain markets were higher today with the help of Crude oil being up as much as $7.86 at one point today.  The Dow Jones rallied into its close today which should bring more optimism into the overnight grain trade.

Bottom line - I expect a better opening tonight and then see the market selloff.  I feel $4.18 is still resistance and also $4.22 after that.  I see support at $4.11 and $4.09 1/2, I think we can reach $4.09 1/2 tonight or tomorrow.  The close for the day was good and there isn't anything that says the market should head lower on the daily or weekly charts just yet so if you haven't covered your feed needs yet I would do so with options.

MEAL
Dec '08 meal went through my resistance levels that I posted yesterday but failed to close above them.  It looks like Dec '08 meal will open better tonight and sell off (just a little) like corn.  I expect $277.30 to hold support tonight and tomorrow.  Informa released its projected yield for soybeans at 40.2 vs. 40.9 last month which was slightly positive to the soybean market.

Bottom line - I expect and early low tonight and rally as the evening progresses but tomorrow I expect an early high and late low.  I expect the markets to be volatile tonight/tomorrow when the results of the Presidential race are known.  $281.20 is resistance for tomorrow and then up to $284.70 for the next level.


HOGS
As I said yesterday I thought the hog market would be mixed today and trade both sides of unchanged which we narrowly did.  The cutout number we had yesterday was negative but I felt the market already had some of it figured into the price.  I can't seem to find any positive fundamental news from the countryside and with that being said I can't seem to find any bullishness to the market.

There is nothing in the charts that would make me think we could rebound from these levels and with negative fundamentals and no technical indicators to get excited about I will remain short the market.  As I said yesterday we do have the Goldman roll coming up starting Friday I believe and going until approximately next Friday.  The roll will be selling the Dec '08 contract and buying the Feb '09.  Don't think the Dec '08 will lose value against the Feb '09 as a rule because these guys are professionals and can get their business done in ways that make logic look stupid!

Bottom line - I don't see any major rallies in the market at this time and I would expect more of the same from the market, continued lower movement until we see the cash and cutout come around.  Cutout was down $3.53 today so I expect very weak trade tomorrow.  The Dollar moved in our direction today but is still at elevated levels compared to earlier this year.

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
-----------------------------------------------------------------------
11/04       153.4      57.55   80.84   60.03  41.34  87.31 38.80  65.71
Change :               -3.53   -3.63   -1.63  -4.85  -0.53 -6.52  -1.57
-----------------------------------------------------------------------

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 :   .89 lwr   :  1.47 lwr   :  1.50 lwr   :   .08 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 43.50-55.00 : 43.50-55.00 : 43.50-55.00 : 46.00-54.73
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    53.21    :    53.43    :    53.65    :    52.53
--------------------------------------------------------------------------
Head Count      :   21,657    :    9,432    :   13,359    :    8,098
==========================================================================

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.

Hog Comments - 11-03-08 - An quiet day before one of the biggest elections in U.S. history.

CORN

Dec '08 corn opened relatively unchanged and then headed lower for a few minutes. By the end of the first hour of trade corn made a high of $4.18 which would have been $.16 1/2 higher. The first hour of trade was positive and suggested the market should close above the day session opening price of $4.02, which it did, closing at $4.03.

It is interesting to note that Crude was down during the entire day session for Dec '08 corn as well as the U.S. Dollar Index being higher. When corn made its rally it was doing it on its own and without help from the "outside" markets. This type of action is positive in the sense that the commodities may be breaking further away from outside forces. The only problem is when you have the outside market make huge historical moves it is hard for commodities not to follow in some fashion. FCStone released its November yield estimate for corn this afternoon and the number was 153.4 vs. 151.70 in October. The trade is expecting a larger corn yield so even though face value the increase looks negative I would call it neutral to mildly friendly.

Bottom line - I expect Dec '08 corn to open slightly lower tonight and sell off to find support. I look for support at $3.95 1/2 and then down to $3.92 3/4 if we even get this low. I am looking for early lows and late highs tonight and tomorrow. Commodity funds were buyers of approximately 3,000 contracts today and I expect follow through buying tomorrow. Resistance for tomorrow is $4.06 3/4, $4.09 1/2 and $4.18. I expect corn to firm as the day progresses tomorrow.

MEAL
Dec '08 meal was once again strong; it opened at $275.40 or $2.40 better than Friday's closing price. The first hour of trade was positive for Dec '08 meal but it failed to close above the opening price by $.20 which isn't a huge difference by any stretch. I mentioned last week Thursday that I would like to see the Dec '08 futures close above $277.90 if we were to see follow through buying this week. We didn't close above $277.90 so I am somewhat skeptical of a follow through rally this week.

I don't believe the market will tank, I am uncertain of its strength to make new highs above last week's which were $291.30. Resistance for this week will be $279.90 and $291.30; support will be $268.90 and $261.40.

Bottom line - I expect meal to open better this evening because of the FCStone crop survey having a soybean yield of 39.2 compared to last month's number of 39.4. This alone isn't wildly bullish but the market looked firm prior to its release and this looks like a good news item to pin positive trade on. I expect early lows and late highs during tonight and tomorrow's trade. It feels like $277.70 and $280.80 are viable targets for tonight/tomorrow. I expect meal to firm as the day progresses tomorrow.

HOGS
Dec '08 hogs still can't seem to get out of the downhill slide it is on, other than the fact we were only down $.40 today which is a minor victory when you look at it. I am still not friendly the Dec '08 contract because of cash prices and the outlook of the pork cutout. The Goldman roll will begin this week applying pressure on the Dec '08 and supporting the Feb '09 contracts. Even though the public knows that Goldman will be selling the Dec '08 and buying the Feb '09 contracts, they have an excellent way of getting their business done on their own terms and not allowing the market to move away from them too much.

If the Dec '08 contract trades higher tomorrow I see resistance at $55.35 and $56.05. I don't think we can get a lot higher than these levels tomorrow. I will continue to go with a lower call for tomorrow due to the lack of any fundamental news to get excited about. The U.S. Dollar Index was up again today and we all know that doesn't help matters any.

Bottom line - I expect Dec '08 hogs to trade both sides of unchanged tomorrow. We are oversold and we are due for a small correction, however, I feel the correction will be met with stiff resistance. We will have the Goldman roll that begins later in the week and runs through next week to contend with which should provide some resistance as well.

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
-----------------------------------------------------------------------
11/03       103.8      61.08   84.47   61.66  46.19  87.83 45.33  67.28
Change :               -1.09    0.92   -3.51   0.01  -2.70 -2.34  -1.97
-----------------------------------------------------------------------

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 :   .49 lwr   :   .17 lwr   :   .03 hgr   :   .63 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 45.50-58.00 : 45.50-58.00 : 45.50-58.00 : 46.50-56.08
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    53.92    :    54.80    :    55.02    :    52.62
--------------------------------------------------------------------------
Head Count      :   25,875    :   10,630    :   13,784    :   11,577
==========================================================================

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.

Hog Comments - 10-30-08 - Grains take a breath as hogs choke.

Due to time restrictions I am writing my comments prior to the close of the Dow Jones which may affect the accuracy of my comments.

CORN

Dec '08 corn opened at $4.16 this morning, rallied to $4.17 and then fell apart.  I said yesterday that I thought we would have a neutral to lower opening last night and then find follow through buying from yesterday's close.  That is exactly what happened, we had a quiet open and then rallied through my resistance number of $4.27 3/4 and got to $4.33 for last night's high.  The other number of $4.11 1/2 found some support early today but then gave way to the selling and the market dropped to $4.02 1/4 before bouncing prior to the close.

Dec '08 corn still has some downside left in it tonight and MAYBE early tomorrow.  I expect corn to open slightly better tonight and then sell off after a small very small rally.  I am not bearish corn at this level just yet, I think we are correcting from our recent gains however we haven't done anything to change the trend from down to up so keep that in mind as well.

Bottom line - I expect a better opening tonight and a small bounce only to be met with selling around $4.17 if the market even gets that high.  I would say we have a chance to test our low of $4.02 1/4 tonight and then tomorrow I expect early lows for the session and late highs.  The market also left a gap at $4.20 that we should fill in the near future as well, maybe even late in the session tomorrow.

MEAL

Dec '08 meal made a high of $288.90 last night which is just above the $286.80 I talked about in my comments from yesterday.  It looks like Dec '08 meal should open better tonight and find some minor buying and then hit resistance again around today's high of $284.10 to $285.50.  The meal complex was the strongest commodity in the Ag markets today as the Dec contract closed $.30 higher on the day.

Bottom line - I expect the Dec '08 contract to be higher tonight and should find some resistance and then probably trade lower for most of the evening.  I think we may see early lows during the day session tomorrow though.  Last week's high was $277.90 and if Dec '08 meal closes above this level tomorrow it would be viewed as positive and I would look for more follow through buying next week.

HOGS

Dec '08 hogs did what I thought today which was trade lower considering the cutout number being down so much last night; I guess it doesn't take a rocket scientist to figure that out though!  The market was weak all day but was surprisingly firm in the back end months such as April '09 which only closed $.47 lower compared to the $1.57 lower close by the Dec '08 contract.

I am still not friendly the Dec '08 contract, I still think we could test our contract low of $55.45 tomorrow.  The contract low is only $.55 below our close today and is well within reach for tomorrow's trade.

  

Bottom line - I expect Dec '08 hogs to be weak again tomorrow and I expect a test of the $55.45 area at some point in the day.  The US Dollar traded just below unchanged all day and wasn't much of an issue in today's markets.  I also think we will have an early low in the Dec '08 contract tomorrow and see some short covering going into the close and into the weekend.

The cutout number is not included today because I am posting prior to its release.

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 :  1.43 lwr   :  1.40 lwr   :  1.18 lwr   :   .38 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 49.25-57.70 : 52.00-57.70 : 49.25-57.70 : 50.00-55.41
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    54.85    :    55.91    :    56.13    :    52.95
--------------------------------------------------------------------------
Head Count      :   21,934    :    8,883    :   13,172    :    8,582
==========================================================================

 

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.

Hog Comments - 10-29-08 - Grains take off and leave hog behind.

CORN

I waited until the Dow Jones closed today before writing my comments unlike yesterday!  We had the perfect storm in the corn market today.  The U.S. Dollar basically crashed down over 200+ points for most of the day, crude oil was up $5.51 and the Dow Jones was all over the place waiting for the Fed's decision on interest rate cuts.  When Dec '08 corn closed today the Dow Jones was basically unchanged and then fell to 74 lower at the close of the Dow.  The Fed's did cut the rate by .50% which is what Wall Street was looking for and expecting.  Stocks made most of the daily range in the last hour of trade.

Dec '08 closed up limit today at $.30 higher and settled at $4.20 3/4.   The one thing I notice about days that we close toward our high is that we typically gap higher at the beginning of the next session.  If the market gaps higher tonight, I would expect some follow through buying and then some selling should surface.  I expect resistance at $4.27 3/4 tonight and then sell off some. 

Bottom line - I expect tonight's open to be neutral to lower and then find follow through buying.  I say lower because the Dow Jones sold off going into the close.  If we open lower I expect the market to find some buyers and then take us up to $4.27 3/4 before hitting resistance.  If $4.27 3/4 violated then the next level of resistance is $4.42 1/2.  I expect the market to respect $4.27 3/4 for resistance and $4.11 1/2 for support during tonight and tomorrows markets.  If the Dollar continues to crash and crude maintains its rally we could see better markets all day tomorrow.

MEAL
Dec '08 meal started its rally around 10:00 a.m. this morning and follow through for most of the day but had trouble holding a limit up bid at $286.80.  I was surprised we couldn't hold the meal market firm all day considering corn was up limit for most of the day. 

Bottom line - I expect Dec '08 meal to slightly lower tonight and then find buyers and rally toward today's high of $286.80 and if it really gets crazy we could go to $291.30 from Sunday nights high.  I don't think we will have a runaway market to the upside tomorrow like we did today unless we have the Dollar weak and crude oil strong again.

HOGS
Dec '08 lean hogs did very little again today with a trade range of $1.05 it was relatively quiet compared to corn, soybeans and the outside markets.  I don't understand why hogs have rallied when the Dollar was moving higher and now that it tanked today the market moves lower.???  After seeing the cutout number this afternoon I guess someone knew about it before it came out and that was some of the reason for the decline.

I have been saying for the last couple of commentaries that I didn't/don't like the Dec '08 hog contract and today's cutout number may prove me right.  Cutout was down $2.51 today which is a very large one day drop; cash was up slightly so the packer margin just tightened.  With the fundamental news we had today I don't think the contract low of $55.45 is safe any longer.

Bottom line - I expect Dec '08 hogs to be very weak tomorrow on the heels of tonight's cutout number.  I believe some of it was factored into today's trade but the balance will hit tomorrow.  Some to the buying over the past few sessions was short covering so we could see more selling come into the market tomorrow.  I expect a test of $56.60 which was today's low in the Globex pit and a probable test of the contract low of $55.45 either tomorrow or Friday.

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
-----------------------------------------------------------------------
10/29       117.9      62.66   85.45   66.05  46.36  88.97 47.94  69.18
Change :               -2.51   -2.86   -1.01   4.34  -3.89 -6.77  -1.46
-----------------------------------------------------------------------

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 :   .35 hgr   :  1.04 hgr   :   .75 hgr   :   .09 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 49.50-58.65 : 50.50-58.65 : 49.50-58.65 : 50.00-55.41
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    55.82    :    57.24    :    57.09    :    53.18
--------------------------------------------------------------------------
Head Count      :   23,966    :   13,336    :   16,165    :    7,621
==========================================================================

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.

Hog Comments - 10-28-08 - USDA drops the ball in the Oct 10th report.

USDA CORRECTS OCTOBER CROP ACREAGE ESTIMATES

Contact: Keith Williams, (202) 720-4623 or Ellen Dougherty, (202) 690-8122

WASHINGTON, OCT. 28, 2008 – The U.S. Department of Agriculture today adjusted its official October acreage and production estimates for six field crops. USDA revised the numbers after discovering discrepancies in a Farm Service Agency (FSA) database of producer-reported crop acreage used by the National Agricultural Statistics Service (NASS). NASS published the changes this morning in a corrected version of the Oct. 10 Crop Production. The World Agricultural Outlook Board also issued an abbreviated World Agricultural Supply and Demand Estimates (WASDE) report reflecting the acreage updates.

This morning’s crop report includes changes to acreage and production estimates for corn, soybeans, sorghum, canola, sunflowers and dry edible beans. The revisions will have no impact on crop support payments to farmers.

Compared to the Oct. 10 release, the corrected Crop Production report reflects 1.2 percent fewer planted acres for corn, 1.4 percent fewer planted acres for soybeans, 1.9 percent fewer acres planted acres for canola, 0.8 percent fewer planted acres for sunflowers, and 0.7 percent fewer planted acres for dry edible beans. The report also reflects a 2.5 percent increase in planted acres for sorghum. Even with the reduced acreage estimates, the 2008 corn crop is still on track to be the second largest on record, while the soybean crop will be the fourth largest.

The revised WASDE report lowers projected supplies, use and ending stocks for both corn and soybeans. Price forecasts are raised slightly for both commodities. Sorghum supply and use projections are revised to reflect the higher forecasted production.

In calculating crop acreage, NASS draws upon several data sources, including farmer surveys, satellite imagery and information reported by producers to FSA. In the original Oct. 10 report, NASS’s production estimates were within the range of projections from private industry and other sources. Those independent projections had corn production ranging from 11.8 to 12.3 billion bushels and soybean production ranging 2.85 to 3 billion bushels. NASS projected 12.2 billion bushels of corn and 2.98 billion bushels of soybeans.

After the Oct. 10 reports were issued, FSA analysts noted a discrepancy between the raw data on its mainframe and the data it had provided to NASS on a system known internally as a “data mart.” The data mart correlates and organizes the raw data for presentation to FSA county staff, NASS and other users in a more concise and accessible format.

USDA analysts have confirmed that data mart information used in previous reports was consistent with the information in the FSA mainframe database. Database management experts will review the discrepancies in the October data, focusing on how the two systems interact and how the mainframe data are transmitted and translated into the format used in the data mart.

This morning’s corrected Crop Production report uses data from the FSA mainframe database, as will the Nov. 10 report.

As part of its comprehensive review process, USDA has notified the Office of Inspector General of the data discrepancy. Additionally, USDA has informed market regulators at the Commodity Futures Trading Commission and the Securities and Exchange Commission.

SOURCE - USDA

CORN

Let me get this straight, the USDA made a revision to the Oct 10th report because they found discrepancies?  The statement suggested a change to acres but they also lowered demand for corn.  The ending result for corn was a gross 167 million bushel decline in production from the Oct 10th report BUT they lowered the feed and residual by 50 million bushels and also exports by 50 million bushels.  All of the changes had a net effect of a 67 million bushel reduction in this year's carryout so what seemed bullish was actually no big deal.

Dec '08 corn opened much higher than it needed to today.  It opened the day session at $4.07 which is just below the number of $4.07 1/2 that I thought we would reach at some point this week.  I still need to see the market close above $3.90 1/4 before I get excited about another challenge of $4.07 1/2.  $3.86 3/4 is the 50% retracement back to the Sunday night low of $3.64 and this level needs to hold if the market has any shot of moving higher from here.

Bottom line - I expect Dec '08 corn to open slightly better tonight and find resistance at $3.97 3/4 if we even get that high.   It feels like the market wants to sell off and maybe touch $3.81 1/4 which is our next area of support.  If $3.81 1/4 doesn't hold support and we close below it I would expect another test of $3.64.  It feels like corn wants to be weak tomorrow and that is my call for tomorrow, weaker trade for Dec '08.  The daily chart is suggesting a possible sideways trade range between $3.64 and $4.09 in the Dec '08 contract, we will see.

MEAL

Dec '08 soybean meal had a tremendous gain in the overnight and early day session based on anticipation of a bullish revision to soybean acres.  Like corn the USDA reduced the production number by 45 million bushels but also lowered the export business by 30 million bushels for a net decrease in carryout of 15 million bushels.  I was surprised to see the market sell off as much as it did today considering the revision wasn't negative but it really wasn't bullish by any stretch either.

  

Dec '08 meal needs to close back above $276.40 in the near future if it wants to challenge the high set last night of 291.30.  If it doesn't close above $276.40 then I would anticipate a test of $261.40 in the near future.

 

Bottom line - I expect Dec '08 meal to open higher tonight and test $271.20 before it finds resistance and backs off.  Based on the hourly chart it suggests meal should make an early high and late low tonight/tomorrow.  I will go with a weaker call for tomorrow but the Dow Jones was around 150 points higher when meal closed and is now trading 600 points higher as I write this.

HOGS

I really don't have much to say about hogs other than I still don't like the way the Dec '08 chart looks.  I still think we have some downside in the Dec '08 contract.  There was nothing special about today's trade as we only had $1.00 trade range today from high to low.  The noon reports had cash lower once again which is really no surprise.  The U.S. Dollar Index is now trading lower as the Dow Jones makes new highs but the strong dollar hasn't helped hogs any in recent weeks.

 

I believe we will still see lower prices for Dec '08 hogs either tomorrow or yet  this week.  I still think we could see another test of $57.60 and probably even down to $57.20 and I am still not ruling out the low of $56.00.

Bottom line - I expect Dec '08 hogs to trade lower tomorrow based on the charts.  If we do trade higher I think today's high of $58.57 (Globex pit) should hold as good resistance.  I anticipate a test of $57.20 tomorrow at some time. 

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
-----------------------------------------------------------------------
10/28       105.1      65.17   88.31   67.06  42.02  92.86 54.71  70.64
Change :                0.11   -0.04   -1.33  -0.05  -0.19  1.18   0.10
-----------------------------------------------------------------------

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 :  1.11 lwr   :  1.81 lwr   :  1.57 lwr   :   .62 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 50.00-58.75 : 50.00-58.75 : 50.00-58.75 : 52.32-55.41
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    54.85    :    55.70    :    55.99    :    53.10
--------------------------------------------------------------------------
Head Count      :   16,014    :    6,908    :    9,605    :    6,346
==========================================================================

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.

Hog Comments - 10-27-08 - An all day rally in corn and hogs stay firm.

CORN

Dec '08 corn didn't follow the overnight action of being $.05 lower, it actually opened about 1/4 cent higher.  The overnight news was the equity and foreign stock markets tumbling once again.  The Dow Jones futures were down over 200 points at one time in the overnight session.  The Dow opened lower and traded as much as 174 lower but rallied as the session went on.  It was towards its high when the Ag markets closed this afternoon.

 

Dec '08 didn't spend much time lower today; as a matter of fact, it mostly traded lower during the first hour of trade then spent the balance of the day firmer.  The Dec contract has a big weekly buy signal at $3.71 1/2 which is conditional.  We need the market to close above this level on Friday and hold gains into next week.  If the signal is good it could be a violent move higher from here.  I am not holding my breath just yet.  I am just pointing out the signal.

Bottom line - I expect Dec '08 corn to open slightly lower tonight because the Dow Jones sold off around 350+ points from the time corn closed to the close of the Dow Jones.  $3.75 1/2 and then down to $3.72 3/4 should provide support this evening and tomorrow with an initial upside target of $3.90 1/4 to $3.94 1/4.  I expect a test of $4.07 1/2 if we can close the market above $3.90 1/4.  I expect corn to follow the Dow futures tonight until we get a better feel for things in the morning.  I feel there should be buy stops above todays high of $3.87 tomorrow.

MEAL

Dec '08 meal opened the day session slightly better than the overnight close.  The open was the low of the day for Dec '08 meal, it didn't look back.  If the Dec '08 meal contract closes above $279.20 then I think we could target $286.70 very easily.  I expect the meal market to open weaker tonight for the same reasons in corn, the Dow dropping around 350 points from the Ag close to the Dow close.

 

Bottom line - I expect the meal market to continue is firm feel but it should follow the financial markets to some degree tomorrow.  I expect support to be $269.90 to $267.90 tonight and tomorrow but I feel $269.90 should hold assuming we don't have a global market meltdown tonight.  It feels like the market wants to test $286.70 this week but I still need to see a close above $279.20 before I will get that excited.  I expect early lows and late highs in the meal market tonight/tomorrow.

HOGS

Dec '08 hogs traded as much as $.77 lower today only to come back and close higher on the day by $.05.  Did  I mention the U.S. Dollar Index was making new highs for 2008 again today and hogs still rallied?  I will not complain!  I don't see how the Dec '08 contract can hold this little rally its had, I am not friendly the Dec '08 contract at all but it seems to stay firm.

Today we touched the 50% retracement level of $59.15 in Dec '08 hogs by making a high of $59.17 and then backing off the high by $.60.  I am expecting a lower day tomorrow in the Dec '08 contract because I don't like the chart and also the cash and cutout numbers were lower, cash down around $1.35 and cutout down $.91.

Bottom line - I expect Dec '08 hogs to trade lower tomorrow and touch possible support of $57.60 and then a possibility of $57.20 after that.  The resistance levels for tomorrow are $59.15 and $60.00; I don't think either of the resistance points will be tested tomorrow.  I expect a lower opening tonight and follow through into tomorrow's day session for an overall weaker day in hogs.

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
-----------------------------------------------------------------------
10/27        46.3      65.06   88.35   68.39  42.07  93.06 53.52  70.54
Change :               -0.91   -0.66   -0.16  -0.36  -0.97 -0.65  -3.31
-----------------------------------------------------------------------

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 :  1.37 lwr   :  1.57 lwr   :  1.62 lwr   :   .56 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 49.25-60.47 : 49.25-60.25 : 49.25-60.47 : 50.50-59.12
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    55.73    :    57.79    :    57.66    :    53.72
--------------------------------------------------------------------------
Head Count      :   21,159    :    7,179    :   10,516    :   10,413
==========================================================================

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.

Hog Comments - 10-23-08 - Grains get a small recovery and hogs are balanced.

Side note: I have a big buy signal on the weekly Crude Oil chart at $68.75.  This is a conditional buy signal meaning I would like to see the market close above $68.75 this week and not trade below it next week.  If it does trade below $68.75 next week then I would like to see it close above $68.75 next week for sure but if it doesn't then the signal is gone.  This is one of those signals were if it is good, the market makes a big move.  This isn't a recommendation, it is an observation.  There is an OPEC meeting tomorrow as well that could affect oil prices significantly.

CORN

There was some enthusiasm in the corn market today which was a little more than I expected.  I thought we would be lower last night which we were and then move higher and touch $3.91 today.  We touched $3.91 but didn't stop there, we kept going until we hit $4.01 3/4.  I was impressed with Dec '08 corn today as it held firm in light of the Dow Jones dropping 300 points off of its high as the grain markets were closing.  The Dow Jones closed 172 points higher on the day which should bring support to tonights trade.

Dec '08 corn closed at $3.90 1/4 today which is below the $4.00 level I would have like to see it close above.  The close was still above the 62% retracement back to last nights low of $3.79 and if we hold this level of support tonight I would expect another test of $4.01 3/4.

  

Bottom line - I expect corn to open higher tonight and find follow through buying.  I think we will see some resistance at $3.96 but not enough to stop the market.  I feel we will test the $4.01 3/4 high either tonight or tomorrow.

MEAL

Dec '08 meal had a good run today closing at $269.00 today up $11.70.  I said yesterday that I had a target of $272.10 and today's high was $272.40 so this objective has been met.  I expect a test of $279.20 possibly tomorrow and if not tomorrow then early next week.  If the Dec '08 meal closes above $267.00 tomorrow that would confirm a bottom in the Dec '08 meal based on what I look at.

 

Dec '08 has resistance tomorrow at today's high of $272.40 and then up to $279.20, the support levels for tomorrow are $265.50 and then down to $263.90.  The Dow Jones is now up off of the low that were set at approximately 12:30 pm cst today which will give the Ag markets some strength going into the overnight session.

Bottom line - I expect meal to open better tonight and trade better for most if not all of the evening.  I feel we will be firm tomorrow as well and touch the $279.20 level at some point.  All of this assumes the Dow Jones doesn't absolutely crash.  The Ag markets are beginning to trade more on their own versus recent weeks where we followed very closely to the outside markets.  I expect better trade in Dec '08 meal tomorrow.

HOGS

Dec '08 hogs opened up slightly this morning and rallied to $58.72 which is through the $58.30 area of resistance that I thought would hold.  Dec '08 hogs did make early highs and closed toward the low of the day which is close to what I thought other than I figured we would actually trade lower today.  The cash was still nothing to write home about in the noon report put out by the USDA.  National cash hogs were $2.29 lower but the regional cash prices were anywhere from down $.54 to up $.17.

I didn't like the close in Dec '08 hogs today, I think we are setting up for a slug of selling below today's low of $57.52 (Globex pit).  If we do get below the $57.52 level tomorrow and experience some selling I would target the $57.05 to $56.70 area before we find support.  If those levels do not hold then I see another test of $55.45 in the near future.

Bottom line - I expect Dec '08 hogs to open better tonight and not do much in the evening hours but tomorrow we should see selling below $57.72 in the form of sell stops.  I am not saying sell the open tomorrow but I don't like what I have seen over the last couple of days, it looks like the little rally we had is coming to a close unless we can get and close above $58.70.  My expectation for tomorrow is lower with a possible test of $56.70 to $57.00.

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
-----------------------------------------------------------------------
10/23        59.5      66.39   89.38   68.35  42.34  94.02 54.31  73.79
Change :                0.45   -0.27    0.38  -0.23  -0.29  2.06    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 :   .16 lwr   :   .16 lwr   :   .18 lwr   :   .28 hgr
Negotiated      :             :             :             :
CARCASS BASIS   : 50.75-61.50 : 50.75-61.50 : 50.75-61.50 : 51.00-57.00
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    57.28    :    58.92    :    58.82    :    54.30
--------------------------------------------------------------------------
Head Count      :   21,437    :   10,434    :   14,128    :    7,309
==========================================================================

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.

Hog Comments - 10-22-08 - Help, we've fallen and we can't get up!

Greetings from SNOWY Brookings, SD.  Yes, I said snow!

CORN

Dec '08 corn took no prisoners today as it was weak right out of the gate and remained that way for the balance of the day.  The first hour trade was negative which suggested the market should close below the opening price which it did.  I said yesterday that I thought we would open slightly higher last night and then sell off which was true.  I also said I thought we would test yesterday's low of $4.06 1/2 which happened overnight.

I look at the way the market traded today and see we closed below the $4.07 number I talked about yesterday.  If we don't close above at minimum $4.00 tomorrow then I would say we have a good shot at testing the low of $3.71.  It feels like the market will open lower tonight and follow through lower for awhile and then firm some.  The Dow Jones dropped another 150 points going into its close from where it was trading at 1:15 p.m. cst. when grains closed.  Oil held steady.

Bottom line - I think Dec '08 will open lower tonight and continue lower for awhile and then find some support around $3.81 to $3.71.  I don't think we will challenge $3.71 tonight or tomorrow UNLESS the Dow Jones is negative again.  The resistance level for tomorrow is $3.87 1/2 to $3.89 1/2.  If the Dow Jones is steady tomorrow I think we could challenge todays high of $3.91.  Watch the Dow Jones in the morning for Dec '08 corn direction.

MEAL

Dec '08 meal continues to give me reason to believe that when the rest of the markets are done selling off, meal will have a good rebound.  I said last night I thought we would test the $267- 268 area but only managed to get to $266.50.  I also said I expected the Dec '08 contract to be firm today which it actually was compared to corn and soybeans.

Bottom line - Dec '08 meal closed above $254.50 which is the 50% retracement back to the low of $236.90 we had last week.  I expect tonight to open lower and trade lower for a short while before finding some support around $254.50 again.  Again, I expect Dec '08 meal to be firm tomorrow; a close above $254.50 would keep the upside target at $272.10 but if we close below then it would be $250.30 and then all the way down to $236.90.

HOGS

Dec '08 hogs opened weaker this morning and traded weaker for a good portion of the morning.  I still don't understand why the Dec '08 contract is so firm considering the cash market is still nothing to write home about.  Cutout had its second day in a row of higher values closing $.59 higher this afternoon but the U.S. Dollar Index is still on a mission and was up approximately 140 points today, again!

Dec '08 still looks like it should be weak and I am going with the weaker call again for tomorrow.  I would expect a higher opening tonight and probably trade better for most of the overnight session just because of the lack of volume.  I don't expect Dec '08 to be a lot higher tomorrow but if it is I think $58.30 will provide some good resistance.

Bottom line - I expect Dec '08 to have early highs tomorrow and late lows.  $56.85 is an area of support that I think we could visit tomorrow and I don't believe cash will be all that strong yet to revive the Dec '08 contract.  I am going with a weaker tone tomorrow for hogs.

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
-----------------------------------------------------------------------
10/22        81.8      65.94   89.64   67.97  42.58  94.31 52.26  73.79
Change :                0.59   -0.45   -0.93   0.60   1.16  2.80  -0.06
-----------------------------------------------------------------------

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 :   .73 lwr   :   .01 lwr   :   .10 lwr   :   .53 lwr
Negotiated      :             :             :             :
CARCASS BASIS   : 50.75-61.00 : 52.00-61.00 : 52.00-61.00 : 50.75-58.78
185 lb Base Hog :   wtd avg   :   wtd avg   :   wtd avg   :   wtd avg
Plant Delivered :    56.94    :    58.81    :    58.67    :    54.04
--------------------------------------------------------------------------
Head Count      :   26,632    :   13,011    :   16,667    :    9,965
==========================================================================

 

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.