Look For Hog Weights To Drop Off Tomorrow By Dennis Smith
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Tuesday July 9, 2019
Packers are now spreading the word, talking openly and boldly that supplies will remain a burden for the entire month. Rarely do packers divulge such information and rarely are they telling the truth when they do. Perhaps we’ll see a sharp drop in weights 24 hours from now hinting that we’re almost through the backlogged supply. The first day of the Goldman Roll saw large volume of trade, reported at 98,700 with open interest down 6,000 on the bearish performance. Index funds are rolling out of Aug but they don’t appear to be moving into the Oct. July hogs posted a fresh contract low yesterday. We have no futures positions from the long side but we’re still holding some bullish Oct option positions. We’re waiting for a bottom to develop.
The Goldman Roll saw volume in LC futures yesterday active at 86,900 with open interest down 3,600. Funds are rolling out of Aug and into the Oct. Live cattle probed the upper end in an attempt of an upside breakout. It did not materialize. Support is 100 points lower. I don’t have show list numbers this week. The weekly kill is projected to be 660,000 or up from 650,000 last year. Weights have bottomed and beef is expected to trade lower this week. The jury is out regarding the direction of the cash steer market. I don’t have a strong opinion on this week’s cash. IMO the futures market has bottomed. ON weakness I want out of short feeder positons we have on the book and we’ll continue to unwind cattle hedges.
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