Hogs Jul/Aug

TraDaToR

TraDaToR

Hello,

The spread is at historical low levels.

Any reason for July being so cheap relatively to August in this post -bull market?
:)
 
TraDaToR said:
----spread is at historical low levels.
----reason for July being so cheap relatively to August....
----post-bull market?
More...
1) Large-scale liquidation of "sick hogs" is expected near-term because of that "P.E.D. disease" with maximum tightness of supply occurring in August to justify the price on that contract. :eek:
2) In order to re-expand the herd, female hogs, i.e. sows and gilts, have to be removed from the slaughterhouse supply pipeline in the near-term, (3 months, 3 weeks, 3 days), in order to give birth to new litters of piglets, the larger the litter size, the more bearish it is in the intermediate-term several months out. Plentiful supplies of corn after harvest can facilitate the expansion also. :)
3) Hogs can remain well-supported if beef/cattle remain "expensive". :cool:
 
It makes total sense.

So according to you, it is not a good idea to against this trend and bet on a reversion to normal values?

Do you read the livestock report from steiner consulting? I find it interesting even if too specialized for me...
 
I have been thinking about how the PEDv epidemic will play out. The supplies I understand in the short run will remain constrained. I am also aware there is a vaccine out that will help producers manage it better. My guess is the supply will be built gradually and there is no chance of a sudden move downward? I was thinking of a straddle option play. I am not quite ready to go short in case the supplies continue to decimated...virus is a biological entity. Who knows if it will mutate again?
 
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