--Special Report Pigs....
Friday June 25th, 2004
7:00 AM South Florida Beach Time
Bellies and Hogs have been in bull mkts for quite Some time now.. However we believe that will soon end as the increases in demand has been met by higher prices which at some point will cause Price rationing and increased supply,, we all know what happens then...' what goes up must go down.'
With the June Pig Crop Due out tonight we recommend that our subscribers maintain a mild short posture in both Hogs and Bellies...
Our estimates for the pig crop versus 1 year ago are :
Total herd up 2%
Market herd up 3%
Breeding herd down 2%.
(For the first time in my life many hog traders are only concerned with the Funds large positions in Hogs and tell me that the pig crop is not important.. which may very well be the case.. )
If these estimates are fairly accurate, it means we will have large slaughter on a daily or weekly basis than in 2003 through the remainder of the year.
Our sources in the industry are in agreement with us that price levels are a bit pricey..
(Caution is due as we are in the minority on this judgment...)
We must emphasize the pork industry usually takes a breather During August and late July. As the Dog Days set in.
Hog slaughter continues to appear to be quite large. Recent slaughter has been up nearly 5% from a year earlier. In addition some marketing have been moved forward during the last several weeks due to high feed prices. This action has added some to the slaughter a tad.. However in the bigger picture hog slaughter in recent weeks is running close to market expectations based on the March Hogs and Pigs. .
Interestingly slaughter under Federal Inspection on June 3 at over 398 thousand head was the 12th largest daily slaughter of record - and this is June.
Prior to 2004, there has never has a slaughter above 390 thousand head in a day in February, March, April, May, June, July, or August.... This year there has been 6 days above 390 thousand in February, 1 day in March, 4 days in April, None in May, and 3 in June. This year is also the 1st time we have slaughtered over 1.9 million head a week in June...There is an outside chance that Corporate America which is meeting demand , may get a bit giddy and signal expansion....
Demand HAS to maintain and increase for prices to move substantially higher, if the retailers whose earning are not very good at this time try to pass on the higher prices to the consumer and he balks and opts for lower priced cuts or even poultry .. a further slip in demand would become evident ..
---Tastes and diets do change and fads do not last forever.---
Friday June 25th, 2004
8:00 AM South Florida Beach Time
THIS PUBLICATION CONTAINS THE VIEW AND OPINIONS OF THE AUTHOR, EXCEPT WHERE OPINIONS ARE ATTRIBUTED TO OTHER SOURCES. WRITTEN PERMISSION IS REQUIRED PRIOR TO ANY DISTRIBUTION OR REPRODUCTION. FUTURES TRADING ARE RISKY AND CAN CAUSE SUBSTANTIAL FINANCIAL LOSS. THE USE OF OPTIONS AND OPTION TRADING INVOLVES A HIGH DEGREE OF RISK. THE USE OF STOPS MAY NOT LIMIT LOSSES TO INTENDED AMOUNTS. SPREAD POSITIONS MAY NOT BE LESS RISKY THAN OUTRIGHT FUTURES POSITIONS. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. SOURCES ARE BELIEVED TO BE RELIABLE BUT NO ASSURANCE IS MADE FOR ACCURACY. ADDITIONAL RISK DISCLOSURE IS AVAILABLE.