Good gains were seen Wednesday by pushing CME futures to new highs for the up trend, which started at the beginning of this month. We have retraced 50% of the big down move, which happened from February through March and are now at the last retracement level (61.8%) at $75.42 on the charts. There was no one big news story out there suggesting a gap higher opening Wednesday. We will note the weekly IA/S MN weight report indicated barrow and gilt live weights are 3 lbs under last year. This has not been supported by the weekly USDA data covering the nation as a whole. That information, which is delayed, suggests barrow and gilt dressed weights are actually 2 lbs higher than last year. We can also note a widely followed analyst group released a special report recently suggesting hog futures are a buy with an $80 objective on the June. Keeping it simple, no matter the reason we continue to note this trade just wants to be bullish. We continue to monitor daily volume totals to see if there is any sign of bears retaking control. When volume begins to build on the days when prices fall, we will have our signal. So far that has not happened. For now continue to respect the fact bulls are in control. In the big picture we still feel FUTURES, not cash hogs, are a little overvalued. Allendale still has 25% of expected marketings left to recommend selling for producers.
The trade is still noting cash hog and cash pork prices have risen more than expected in the last two to three weeks. Cash hogs could be a little constrained (held only to steady to 50 cent higher instead of $1 higher) in the next couple of days as grain/hog farmers market extra hogs ahead of clear skies next week. On the charts we also note the way the market has been trading still supports the bull side. 16,079 contracts of new open interest (new traders entering) were added in just the last four days. Yesterday's volume on the jump in prices was a good 39,050 contracts. For now we will still respect the fact bulls are in control in making speculative trading positions. On the hedge side we will add the last 25% of hedges to our marketing plan for hedgers soon, now that a price rebound has been seen.
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