February 6, 2016

Lean Hog Commentary

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

Posted 02/05/2016

This week's run will end with 2.182 million head according to USDA's weekly estimate. That will be 3.4% under last year. The previous four weeks have seen kill's 4.0% over last year. We will have about 120,000 - 130,000 extra hogs to process next week. That could slow down the recent gains for cash hogs. This week's gains ran about $2 on the cash end.

Futures fell 40 cents this week. The trade has done a relatively good job in estimating where cash hogs will be by next Friday's expiration of the February contract. The lean hog index is at $64. Futures are at $65. This is right next our price outlook from the AgLeaders Conference of $66 on the February. April is expected to end at $70. We see the summer contracts at $78.

Working Trade:

(11/12) Sold February $55 hog put 2.40, risk to 4.20 objective 0. Closed 0.02.

(01/04) Sold April $64 hog put 2.85, risk to 4.20, objective 0. Closed 0.75.

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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