Corn – Dec ’11 corn continues to fail above the $6.55 price level.  The market has been in a sideway’s trade range for the last three weeks ranging from $6.22 to $6.65 1/2.  This sideway’s range is doing nothing but building energy to create a pop in the market in the direction of a breakout.  My bias is that we breakout to the upside above the $6.65 1/2 level but, like today, it makes you wonder. 

The stock market continues to be influenced by EU issues which has been throwing the US Dollar index all over the place.  I’m still of the opinion that corn is currently under-valued as well as our Dollar being over-valued.  Again look for ways to protect your feed needs moving forward!  It is my feeling (heavy on the feeling) that tomorrow could be the breakout day that I mentioned earlier.  Overnight news will trump anything I “feel” but assuming all is quiet on the EU front tonight I think we could have a big day in corn tomorrow.

Bottom Line – I’m looking for an early low and late high tomorrow.

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Meal – Dec ’11 meal was lax once again today but is holding support relatively well.  If soybean meal gets going to the upside tomorrow we could see soybeans make a sizable run toward $12.65.  Now, one needs to assume that overnight EU news is neutral at worst.  These views are also based solely on Candlestick Chart Analysis.  Please do not make any trading decisions based off of what I write without talking to your broker or me first.  I can change my mind before my next post which will do you or your pocketbook no good!

Bottom Line – I’m looking for an early low tomorrow.

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Hogs – Feb ’12 hogs is hovering just below the 50% retracement level of $89.80 as we settled at $89.75 today.  I expected today to be a little bloody and by the end of the day we were trading higher.  I’m not buying into it especially because the cutout has lost over $1.00 in each of the past two days which leads me to think we stalling in the product market.  The cash market hasn’t dropped as fast as the cutout therefore cutting into the margins that packers are banking right now.  I’m hearing from numerous producers that supply will increase in the coming weeks and we also have three holidays to contend with between now and year end.

If you can’t tell I’m not particularly bullish hogs right here.  With the amount of profit being offered in the hog crush, it is borderline idiotic to not partake in locking that up in some form or fashion especially as we continue our trek through the fourth quarter.  Tomorrow’s trade should be telling as it brings the week to a close.  I’m interested to see what type of action we have going into the weekend. 

Bottom Line – I’m looking for an early high in the Feb ’12 hog contract for tomorrow.

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CASH HOG PRICE SHARING NETWORK

We have been using Twitter as a tool to share negotiated cash hog information since April 2011 and it has been working well.  We still need more participants to build our network and provide more valuable information to producers that sell open market pigs or are thinking about getting into the negotiated market to some degree.

There is a lot of work to be done in getting more negotiated hogs into the mix of our daily slaughter.  Industry experts suggest that we need 10% of the daily slaughter to have fair price discovery and we are currently running below 5% on most days!  If there are not enough negotiated pigs in the future then new packer contracts will more than likely be based off of the product and what cutout does.  The hog producers would be hurt by a move like this because there would be absolutely no control over their marketing’s.  Export business DOES NOT show up in our cutout reports.

If you are interested in what goes out on Twitter just visit www.markethogs.com which will bring you to my twitter page and you can see what is posted.  We have producers setup so these messages go directly to their cell phones in the form of a text message to keep producers as up to date as possible on cash news. 

Producer hog margins are still very good at the moment but don’t expect them to last forever.  If you haven’t made any moves in the market please review your situation and visit with your risk manager about a plan!!  If you have been caught in the MF Global debacle and need help with your account and are looking for a place to call home you can give our office a call as we would be glad to help.  Our toll-free number is             1-877-212-2564      .

Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.