Slaughter & Demand a Downer for Hog Futures

Hog futures were down big today on the outlook of both increasing domestic supplies and waning demand.  Hogs were down as much as $1.50 and can’t seem to get out of congestion of the past week’s trading range.

The USDA is said to estimate meat-packers processing 428K hogs just yesterday, which is up more than 2.5% from a week earlier.  Gov’t data also shows wholesale pork prices fell 1.5% yesterday – the biggest one-day drop since the end of last month.

With a seasonal rise in supply ahead and speculative long liquidation selling picking up, in my opinion, I can see hog (futures) heading down.  Also, with record open interest and overbought technical signals are seen as a bearish force,”  said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current hog futures situation.  Moreno added,The lean hog (futures) market looks vulnerable to a significant set-back.”

The trend for hog futures remains up, albeit sideways for the past week.  I am looking for a way in to the long side of this market at this time.

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