The Feb Aug spread is getting licked today as money runs out of the front of the curve. We think this is a bit over done up front and want to buy the April and Sell an Aug.
The Swine Times
Deferred hog contracts are getting beat up because of the Coronavirus/travel bans in and out of China. Cover the Feb-April spread
Demand grows as export sales hit record highs. Were not sure that will matter this morning as the China virus story brings out the sellers.
Last week’s export demand was huge, breaks in supply driven selloffs in G should support futures and converge cash from the bottom
Hog futures were lower last week across the board, held under pressure by dwarfing supply numbers.Hogs are now the whipping post at the CME
Buy Feb- Sell April. Feb-April spreads have pulled back below 7.00. We think this is a great spot to jump in and own the front of the curve.
Supply numbers should be tightening soon and the US-China signing taking place in two weeks. There is value at the front of the curve
The pig crop and cold storage reports released after the close on Monday will set a bearish tone into the holiday trade.
We think the breeding herd will be seen as massive on Monday. We want to buy near term with demand in mind and sell deferred supply
Hog futures will get a boost to open the week with the phase 1 complete. Summer hogs should begin to trend.