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Home / Futures Blog / The Swine Times – January 22-26, 2018 – Hog Trading Wrap Up

The Swine Times – January 22-26, 2018 – Hog Trading Wrap Up

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CURRENT POSITIONS:

  • LONG 1 UNIT OF APRIL HOGS
  • SHORT 1 UNIT OF AUGUST HOGS @ -8.75

Hog Market Prices – January 15-19

Hog Price Chart

Looking into next week:

  •  As you can tell by the primal cut quotes above, there has been very little activity on the pork product market.
  • Swine Times mentioned last week that the price spread between loins and butts would narrow. We saw that happen this week as the price spread came from $28.21 on Monday, 1/15/18 to $20.83 this Friday, 1/19/18.   Our opinion on the reason the loin/butt price spread  had gotten so wide is that the Winter Olympics hosted by South Korea are just the corner. The Korean importers loaded up their freezers with Boston butts in preparation for the Winter Olympic games.
  • Hams had a modest gain this past week, as sellers have been content to try to keep the prices under control in order for hams to continue to move through their usual channels.
  • The packers have decreased their weekly slaughter schedules in order to prevent any substantial decrease in their margins.  We look for this to continue.
  • The bellies are once again at the forefront, gaining $2.06 in price.  We look for bellies to top out up around $1.50, but we could be wrong.
  • We will be watching the government shutdown news as well, if the shutdown lasts past this week the cold storage report would probably be in jeopardy next week. The event has been slightly dollar negative so far.

How we trade this:

We have revised our prices to buy February and April hogs as follows:

  • The February and April hogs are still a buy on sharp breaks as indicated by the pig crop report. By a sharp break, we mean 150-200 points below Friday’s settlement price. Be cautious. (See the final bullet point at the bottom of this page.)
  • We recommend buying February hogs under $72.00
  • Watch for the opportunity to buy April hogs under $74.00, if they get there.
  • The month of February is particularly slow for pork and we expect this year to be no different.  Swine Times is advising our readers to be patient and watch for opportunities to buy April hogs.
  • We are also looking at buying April selling August hogs at $9.00 to the August or better.
  • The weather will continue to be a factor.  Keep checking weather sources for storms and drastic changes in temperatures.
  • We are still cautioning our readers to pay attention to news stories on NAFTA. Any talk of changes in the trade agreement can cause short term, severe price drops or spikes in live hog futures.

Have a great week. Be sure to sign up for trade alerts so you can stay in step with our efforts.

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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)