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Weekly Purcell Report

by 5m Editor
18 November 2003, at 12:00am

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



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In the lean hog complex we have seen dips across the past few days and as late as Monday down toward the August 18 low at $49.65 on December futures that I've talked about on several occasions in recent letters.

We had a dip as low as $49.85 on November 13. I would buy back short hedges on the December futures around the $50 level and expect this market to rally before replacing short hedge positions in February and April and later contracts.

I don't see major downside risks from here, and I think the slaughter numbers that we have seen are telling us that we have no significant supply expansion coming during the 2004 calendar year.

We usually see some seasonal weakness in April, and Tuesday's close in April 2004 futures was near $60.10, more than $9 above the December close of $50.80.


5m Editor