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Weekly Purcell Report

by 5m Editor
16 July 2003, at 12:00am

US - Agricultural US Commodity Market Report by Wayne D. Purcell, Agricultural and Applied Economics, Virginia Tech.



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Cash hog prices are down a bit in early-week trade, and we have a weighted average price on a carcass basis of around $58 per cwt. in the national direct market.

That translates to $43-$45 on the traditional live basis, and while that is profitable for the larger, more efficient operators, it is about breakeven or a bit better for some of the smaller producers.

July lean hog futures are trading down toward the $62 level, and that is a full $7 off the highs we saw back in May.

The August futures closed below technical support in Monday's session and the same thing is happening in October in Tuesday's session.

The August is trading below a rather obvious trend line that hooks the low on April 15 to the low on June 30.

I would hold short hedges that should have been placed on a sell-stop order during the Tuesday's session on this contract, and that should have been a solid indicator that the fall and late year hogs needed to be forward priced against further downside risk.


5m Editor