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October Hogs are already down as much as 522 points off of Monday’s contract highs, with much of the break coming yesterday and overnight. Ideas that the high pork values of the past few weeks will eventually cause a significant decline in demand helped to spark the selling, and long liquidation selling from speculators was the added force to drive the market lower. The market pushed sharply lower on the session yesterday, as funds turned active sellers early in the day based on weaker cash markets and fears of a minor bump in near-term supply during a period of weaker demand. Cash markets were lower than expected yesterday, and there was a perception that the market has become overbought recently. The short-term supply could jump due to sharply higher grain prices, and this helped drive the market sharply lower even though corn prices moved from sharply higher to lower on the day. August was trading at a significant premium to the cash market and when cash hogs traded steady to $2.00 lower on the day, selling became active. Cash markets are called $2.00 lower for today. Ideas that the Midwest may be too hot next week to move hogs added to the negative tone, as traders see the possibility that producers will want to move those hogs this week ahead of the heat. The CME Lean Hog Index as of August 3rd came in at 85.12, up 59 cents from the previous session and up from 81.80 the week before. The estimated hog slaughter came in at 402,000 head yesterday. This brings the total for the week so far to 1.548 million head, down from 1.565 million head last week at this time and down from 1.588 million head a year ago. Pork cutout values released after the close yesterday came in at $90.63, down 85 cents from Wednesday but up from $89.38 the previous week. Actual US pork production for the week ending July 24th came in at 393.9 million pounds, down from 403.2 million pounds the previous week and down 3.2% from a year ago.
TODAY’S GUIDANCE: Follow-through aggressive selling yesterday, after a key reversal from a contract high for August Hogs on Wednesday, is seen as a bearish factor and confirmation that a significant top is in place. October hog selling resistance comes in at 76.85, with next support back at 74.72.
Hog Market Commentary – 2010.08.06
by Terry Roggensack on August 6, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
October Hogs are already down as much as 522 points off of Monday’s contract highs, with much of the break coming yesterday and overnight. Ideas that the high pork values of the past few weeks will eventually cause a significant decline in demand helped to spark the selling, and long liquidation selling from speculators was the added force to drive the market lower. The market pushed sharply lower on the session yesterday, as funds turned active sellers early in the day based on weaker cash markets and fears of a minor bump in near-term supply during a period of weaker demand. Cash markets were lower than expected yesterday, and there was a perception that the market has become overbought recently. The short-term supply could jump due to sharply higher grain prices, and this helped drive the market sharply lower even though corn prices moved from sharply higher to lower on the day. August was trading at a significant premium to the cash market and when cash hogs traded steady to $2.00 lower on the day, selling became active. Cash markets are called $2.00 lower for today. Ideas that the Midwest may be too hot next week to move hogs added to the negative tone, as traders see the possibility that producers will want to move those hogs this week ahead of the heat. The CME Lean Hog Index as of August 3rd came in at 85.12, up 59 cents from the previous session and up from 81.80 the week before. The estimated hog slaughter came in at 402,000 head yesterday. This brings the total for the week so far to 1.548 million head, down from 1.565 million head last week at this time and down from 1.588 million head a year ago. Pork cutout values released after the close yesterday came in at $90.63, down 85 cents from Wednesday but up from $89.38 the previous week. Actual US pork production for the week ending July 24th came in at 393.9 million pounds, down from 403.2 million pounds the previous week and down 3.2% from a year ago.
TODAY’S GUIDANCE: Follow-through aggressive selling yesterday, after a key reversal from a contract high for August Hogs on Wednesday, is seen as a bearish factor and confirmation that a significant top is in place. October hog selling resistance comes in at 76.85, with next support back at 74.72.
Tags: Hogs, Livestock
About Terry Roggensack