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Home / Futures Blog / The Swine Times- 12/18-12/22

The Swine Times- 12/18-12/22

December 18, 2017 by John Payne

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Happy Monday Hog Traders,

Before we get started, publishers of the Swine Times were on the weekend “talking head” shows This Week in Agribusiness and US Farm Report.  Check out Donna and John below by clicking on the images. They will take you to the videos. Thank you to both programs for having us on, we are so excited our first year in publication has gone the way it has. We will do everything we can to keep things going in 2018.

POSITIONS CARRIED INTO THE WEEK: LONG 1 UNIT OF FEB 18 HOGS

This Week in Agribusiness with Donna Hughes- CLICK HERE

US Farm Report with John Payne- CLICK HERE

Looking into next week:

  • The product market did top out this week and will continue to struggle for the next couple of weeks. Swine Times stated last week that the ham ands bellies would lose the most on the carcass cutout.   That has proven to be the case this week.  Here is the breakdown.

We look for hams to bottom somewhere around $55-$57. For a loss of $ 8-$9
Bellies were the biggest loser for the week, starting out on Monday’s close at $135.04 and finishing the week Friday at$109.37, for a loss of $25.67. At these lower levels, hams and bellies will find buyer interest from both the processors and the export markets. Taking the prices lower now, in our opinion, could prove to be very constructive as we go into the newyear.

  • Loins and butts have already given up about as much value as they are going to for the time being. They have even started to move higher.  The retail chains may choose to run ads for these, given the bargain prices at which both of these retail cuts are currently selling.  Watch your newspapers’ grocery ads for confirmation of this.
  • We mentioned in last week’s newsletter that we were concerned with the Interior Iowa Weights having a possible back up of the market ready hogs.  After looking at the Interior Iowa Southern Minnesota weights that came out Wednesday 12/13, we are pleased to say that as of this writing, this scenario doesn’t appear to be the case.  The weights came in this week at 286.1 versus 286.9 last week and 280.7 last year. While they are still over 5 pounds heavier than last year, the positive take away from this is that the weights came down .8 of a pound compared to the week prior.
  • Next week, there is a USDA cold storage report.  Be sure and compare how many bellies went into or came out of cold storage this past month. Then compare that to the previous month and the previous year. This could be key to what hogs do the first six months of this next year.
  • Next Friday 12/22, we will have the USDA December Hog and Pig Report. Below is the breakdown of the estimates we have gathered to date.

All Hogs               102%
Breeding            101%
Marketing           102%

Market Weight breakdowns      Projected Slaughter dates
180Lbs. & over    103%                                 12/1-1/10
120-179 lbs.         102%                                 1/10-2/20
50-119 lbs.            102%                                 2/1- 4/12
Under 50 lbs.        102%                                 4/13-6/17

How we trade this:

  • Our recommendation is to trade lightly in consideration of the upcoming holidays, the December Hog & Pig Crop, and the USDA monthly cold storage reports.
  • We still recommend buying February hogs under $67 or $66 if they get that low.
  • Watch for the opportunity to buy April hogs under $70.
  • Pay attention to news of sales out front to China and Southeast Asia, as well as other export news. With pork priced this low they are a value to the overseas markets, so we look for export sales to pick up in the first quarter of 2018.
  • Continue to watch the weather and adjust your positions accordingly.

*USDA   National Hog and Pork summary
** Expressed in thousand head
 

 

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

Filed Under: The Swine Times

About John Payne

John Payne is a Senior Futures & Options Broker and Market Strategist with Daniels Trading. He is the publisher of the grain focused newsletter called This Week in Grain, along with being a co-editor of Andy Daniels’s newsletter, Grain Analyst. He has been working as a series 3 registered broker since 2008.

John graduated from the University of Iowa with a degree in economics. After school, John embarked on a 4 year career with the United States Navy. It was during two tours in Iraq and the Persian Gulf where John realized how important commodities are to the survival of society as we know it. It was this understanding that brought about John’s curiosity in commodities. Upon his honorable discharge in 2007, John’s intense interest in the world of commodities inspired him to move to Chicago and pursue his passion in a career in the futures arena.

After a three year position with a managed futures firm specialized in livestock trading, he was given the opportunity to join the team at Daniels Trading. Being in the business and seeing how other IB’s operated, it was the integrity and straightforward approach of the Daniels management team and brokers that attracted him to make the move. Since joining Daniels, John has broadened his fundamental and technical analysis of the markets even further. John has been writing his newsletter This Week in Grain under the Daniels banner since 2011.

Working in high pressure industries like the military and capital markets, John has learned the value of preparation in times of stress. He believes that instilling within his clients the value of a good plan and a cool head for dealing with the day to day swings of commodity markets. He treats every client as a teammate, understanding that his job is to help clients achieve their goals, whatever they may be.

John is a proud supporter of the Iraq and Afghanistan Veterans of America, the Veterans of Foreign Wars and the National Corn Growers Association. When he is not working, he enjoys athletics of all kinds and spending time with his wife and their two kids.

John’s commentary is featured in the following publications:

* All Ag Radio – Sirius Channel 80
* AM 880 KRVN – Lexington, Nebraska
* RFD TV
* Wall Street Journal
* Barron’s
* China News Daily (English version)

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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