Hogs: Wednesday afternoon’s update on wholesale pork prices was a little surprising. A $2.41 gain was reported. Though two pork plants are scheduling to not kill hogs on Friday, this number is a little large. This could push April futures back to the higher end of the range. We are neutral to April futures and supportive to the summer months…Rich Nelson
(2/7) Buy April 86.90, risk 85.40, objective 90.80.
(1/26) Sold 1 Apr 86 put/sold 1 Apr 95 call 2.75, risk to 3.25, objective 0. Closed 1.75.
Cattle: Cattle pushed to new highs yet again Wednesday. Both the February and April contracts made that accomplishment. This market is still fighting against the negatives of packer margins/kill cutbacks and the seasonal rally which typically happens into mid March. For this week, feedlots are offering less cattle for sale than last week and at the same time wholesale beef has advanced. That has some suggesting packers may have to give in this week and pay higher prices. We remain neutral to April cattle and supportive to the far far deferreds…Rich Nelson
(9/07) Sold 2 April 118 puts 2.57 each, risk to 1.00, objective 0. Closed 0.27.
(11/23) Sold 1 April 122 put 2.67, risk to 1.30, objective 0. Closed 0.62.
(1/24) Sold 1 August 122 put 2.15, risk to 3.50, objective 0. Closed 1.92.
(1/24) Sold 1 April 124 put and 1 April 133 call 2.77, risk to 3.90, objective 0. Closed 2.07.
(2/1) Sold 1 October 128 put 3.42, risk to 4.90, objective 0. Closed 3.35.
(2/1) Bought 1 October future and sold 1 October 136 call. On entire position risking 3.50 from entry, objective 7.00 from entry. Futures bought at 132.27 and closed today at 132.75. Call sold at 3.70 and closed today at 3.87. Net position +$0.30.
(2/13) Bought October/sold June 5.50, risk to 3.85, objective 8.00. Closed 5.37.
There is a risk of loss when trading futures and options contracts.
Rich Nelson is Director of Research at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com.