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Protecting hog prices

Agriculture.com Staff 02/06/2006 @ 9:29am

"I am looking at how the cash and futures market have been slipping, what should I do to protect my prices" -Watching Profits Slip Away.

We are seeing the deferred futures in a downtrend which is normally contra-seasonal for this time of year. When we are having this type of market action it is showing that a major low may be coming in. We have large numbers of heavy hogs coming to market, which is also pressuring the market. The best solution for right now would be put options or insurance contracts to protect against the market putting in new lows. Since the market has dropped as much as it has, I do not want to use strategies that will effectively cap the market.

Strategies beyond this must be done on an individual basis because every producer's situation and understanding of marketing tools must be taken into account.

"I am looking at how the cash and futures market have been slipping, what should I do to protect my prices" -Watching Profits Slip Away.

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