Lean hog futures have made an astounding free-fall lower over the last seven trading sessions after a health warning pertaining to processed meats was publicized in the media earlier this week. Hog futures are down another $1.77 per pound currently trading at $59.62 per CWT at the Chicago Mercantile Exchange.
Hog futures were trading near $69 only last week, but the sudden drop in price is because of the perceived potential reaction to demand which has sent prices down almost $10 in such a short period of time. There are other circumstances that are attributed to the early decline of hogs such as a weaker domestic cash market, and USDA data showing record cold-storage pork inventories last month.
“After multi-month highs the hog (futures) market has been hit with a triple whammy,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental assessment of the hog futures market. Medina adds, “The ‘trend is your friend until the end’ saying applies here as it looks like speculators and fund managers have just stopped buying.”
The trend for hog futures has just rolled over to “down” today in my work. Before professionals can do anything with this hog futures market it might require some sort of temporary relief rally happening first – keep away from the free-falling dagger.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
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