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USDA hog data seen as bearish

Lean Hog Commentary: Hogs and Pig will be interpreted as mildly bearish for
futures on Monday. This quarterly report gives the trade an update on the
number of hogs currently alive and gives us estimates as to when they will
finish out. It also estimates hog producer's future production intentions.
Most numbers were very close to the average guess. From the numbers USDA
implied there will be a few more numbers hitting the December and January
time frame than the trade expected. We are calling December and February
futures to be down 50 cents Monday.

Commitment of Traders: Through Tuesday's close commodity trading funds (the
normal long and short speculators) sold 1,661 contracts from the previous
Tuesday. This is four weeks in a row of liquidation. Index funds, long
only, liquidated 3,665 contracts of their net long positions. This is six
weeks in a row of liquidation. News that commodity trading funds and index
funds both were still selling is bearish to lean hog futures.

Lean Hog Technical Commentary: The short term trend is now sideways.

Vital Technical Indicator: Next projected major turn day for lean hogs is
October 14.

Trade Idea(s): Sell 1 December 6675, risk 6772, objective 6450.

Option Strategy(s): Sold 1 December $72 call at $2.20. Settled at $1.42.

Lean Hog Commentary: Hogs and Pig will be interpreted as mildly bearish for futures on Monday. This quarterly report gives the trade an update on the number of hogs currently alive and gives us estimates as to when they will finish out. It also estimates hog producer's future production intentions. Most numbers were very close to the average guess. From the numbers USDA implied there will be a few more numbers hitting the December and January time frame than the trade expected. We are calling December and February futures to be down 50 cents Monday.

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