Wednesday, September 9, 2015 AgriVisor Hog Advice

Wednesday, September 09, 2015
Cash Analysis: The cash hog market is still somewhat lackluster, but that’s not a big surprise.  Bidding should get a little stronger as the week progresses with the return to a full slaughter schedule next week, along with packers filling what should be a big Sat. slaughter.  Next week may still not be wildly robust, but the week after should see stronger markets with the retail segment looking ahead to Nat. Pork Month.  There does appear to be some interest showing in beef with its price break which may undermine pork features the next couple of weeks.  Weights and numbers still suggest hog supplies are not overwhelming; that tends to be the case during September.  Packers are making good money.  Everything points to a rebound, with the base lean value price likely to move back to the middle $70s by early October.  The high $70s isn’t impossible, but more remote.

Tech Comment:  Wednesday was more of the same, minor corrective action.  The next move still looks like it will be a move over last week’s $69.97 high, with $71.65 the initial upside target.  The 200-day MA is at $70.60 offering some minor resistance.  The move over $68.00 a couple of weeks ago positioned Oct. to potentially challenge May’s $74.45 high.  In the short term it should find support at the old resistance at $67.60.  The upgap at $65.82-$66.00 may be the strongest near term support. Feb has acted nearly as good as Oct.  It too looks like it is simply having a minor correction.  The late August reversal up strengthened support at $63.00.  It’s testing July/August resistance at $69.05. Beyond that, the only key level is May’s 72.95 high.  Minor support comes at $65.62 and $64.75.

Live/wholesale prices:  Eastern Cornbelt: na, Western Cornbelt: $67.13, -0.04, Wholesale cutout: $87.01, +1.15.

Daily Cash Recommendation: Plan on skipping sales this week, but if you need to price hogs, wait until Friday.

Feeder Recommendation:  Pig prices should turn stronger as long as lean hog futures sustain their move higher, especially with the shift in ideas about near term grain prices. It continues to look like distant hog futures have turned their trend higher, although a close over old interim high is needed to allow gains to extend.  Current prices look like they still represent good value.  Corn prices may not have much near term downside risk, but for now, the potential to enjoy sustained strength won’t come until after the harvest low, a low cycle counts suggest should come in October.  

Hedge/Option Recommendation:  None 

Hedge/Option Position:  None