May 1, 2016

Lean Hog Commentary

More On-the-Go | Corn | Soybeans | Wheat | Live Cattle | Lean Hogs |

Posted 4/29/2016

June futures have gained 2.80 this week. The downtrend this market has been in since mid-March has been broken. This week's close at 81.70 is still a bit away from the contract high of 83.97. Cash hogs, via the lean hog index, are at 70.47. That will be reported on Monday by the CME. We all know that cash hogs will continue to rally until a peak at some point between May and July. The only question is how much of a rally is needed. The seasonals point to a rising cash hog market until May 19, a break in prices to May 31, then a rally to new highs until June 22.

The seasonals on futures suggest the eventual lows for the June contract on May 27. We can see bulls running this show for another couple of dollars before slowing down. Our target for June is a $78 expiration on June 14.

If you want to buy futures due to this cash market issue we would advise you to concentrate only on short term moves. Though we are bearish this market we will hold off from buys until the chart changes (the market is ready for it).

Trade Recommendation:

(4/29) Stand aside

There is a risk of loss when trading futures and options contracts.

More On-the-Go | Corn | Soybeans | Wheat | Live Cattle | Lean Hogs |

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