FuturesCom Investment Publications
Special Hog Report: Saturday Sept 1st, 2001
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Special Hog Report:
Late Friday afternoon the USDA released it’s Monthly Pig Crop report.
July's pig crop at 8.504 million head was 99.1% of year-ago levels, down 2.3% from the average of analysts' estimates. Pigs per litter last month, at 8.91 head per litter, was 100.7% of July 2000 numbers in-Line with expectations. While
Farrowings were 2.0% below analysts' pre-report projections.
In the past the USDA issued only quarterly data on the Pig Crop.
This year they began issuing monthly data in addition to the quarterly crop numbers.
Most traders have been dismissing data from these ‘New’ monthly reports as non-essential preferring to focus only on the All Important Quarterly Numbers.
Fridays’ report however appears to contain friendly surprises on the Farrowings and
Total Crop numbers. As a result, Winter Hogs (Dec and Feb) are called to open 30 to 50 higher next week on top of the decent gains exhibited Friday…. However as traders know we really won’t know the accurate call until just prior to the open and it may very well be down…Markets are Funny…
However many traders have been expecting the producers to begin expanding the herd to take advantage of the rather strong levels over the last year and have been establishing short positions..
In my opinion Producers have just recovered from what can only be termed as
‘disaster expansion’ during 1997 to 1998. Hog prices reached ALLTIIME historic lows.
Prices went so low during that expansion Canadian farmers were killing newborn piglets and small operators were forced out of the business just as they were in 1994 when prices fell to what then was near historic lows for the ‘ live hog contract ‘near the beginning of the Corporate rush into Hog Farming.
Producers may be a bit reluctant to expand their herds in fear of damaging prices again, especially the large corporate hog farms for these days all corporate earnings are closely being scrutinized…
In addition Friday’s Commitment of Traders data for the week of 8-21 to 8-28 showed the Large non-commercials (usually funds ) liquidating longs and adding to shorts , while commercials not only liquidated shorts on Fund selling they added to longs…
‘Seasonally’ speaking September usually exhibits a bit of strength..
Friday’s settlement on Dec hogs was 5432, while Oct closed at 5825 and the Feb settled out the week at 5540.
FuturesCom currently has Long recommendations for both Oct and Dec Hogs...
In my estimation December has a real good chance of heading towards 5700 to 5900.
While Oct hogs have a shot of approaching the low end of summer hog prices 6250ish to 6332ish …. That is, if they hold ..
Since there is a long weekend ahead of us, things can change and no one can really accurately predict where the Hogs will open on Tuesday. Traders should stay tuned for Updates and Flashes for trading opportunities. related to this report.
Buy dips when able , conservative traders may wish to explore options …
if the price is right ..
Do you need more INFO or a strategy that addresses the above situation ?
If you are a 'paid' Subscriber (I emphasize
Special Hog Report: PAID), you should maintain a close liaison with my office. If you are Not a Subscriber, I suggest you become one and keep informed about ideas in Hogs as well as other markets. Above all, one has to realize that all money making ideas have risk and are just ideas not a guarantee….