Pork product continues to work its way lower as Esignal forex volumes 4th business is finished. 00 is about as big a decline as we ever see.
The problem at the present time is a fairly current producer inventory of market ready hogs. Traders are fully aware of the 2-3 weeks pork product selloff that takes place after July 4th business has been completed and this was the single biggest reason for August hog futures to close 145 points lower for the week. Spread trades will be the biggest focus this week as corn continues higher on lack of moisture. Most traders will be buying December and back hog futures against selling August as feed costs escalate. If you are short August futures below 9475 you should look to take profits somewhere in the 9100-9350 area. Unless we see a good break in the cash hog market we will not be able to get a sizeable break in the lean-hog-index and with August futures at the present 736 point discount there could be little on the down side this week. At this time do not turn an August profit into a loss.
We have priced wholesale beef out of retailer interest. 59 higher for this week last year. As of 2PM Friday there were no cash cattle sales in Nebraska. Most traders believe beef packers are finding near term feedlot market ready cattle to be tight as excessive heat has limited weight gains and in many cases is finding cattle losing weight the last few weeks. October this week as long as corn continues higher. We wanted to add a second short unit to August shorts we have been in from the 118. 00 higher last week will keep this on the back burner for the moment.
You should liquidate this trade should August cattle futures trade over 122. 62 for more than two hours. Substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable.
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