May 30, 2016

Lean Hog Commentary

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

Posted 5/27/2016

July lean hog futures posted a minor 82 gain for the week. Losses early in the week, continued from mid-last week, was seen before support appears later in the week. We are still seeing a widening gulf between cash hogs and cash pork right now. Cash hogs are looking at their eighth day of losses. Cash pork is only two days of its peak of the year. Though an improvement, packers are still dealing with moderately tight margins.

For the next two weeks the market is looking at both the seasonal rise in temperatures and the forecast for above normal conditions. That can keep some pressure on demand.

With cash breaking futures are still trying to figure out where they need to be ahead of the June 14 and July 15 expiration. On the charts the long term up trend line shows support at 79.15. We are officially neutral. We may buy futures if summer contracts offer something discounted like $76 or $77 or sell on moves near $83.

Working Trade:

  • (5/5) Sold 1 July $86 call 1.30, risk to 2.10, objective 0. Closed 0.70.

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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