Last week February 2013 Lean Hogs opened at $86.150 and closed at $84.200. The ride up started back in September 2012.
On the daily chart we see ADX at 18.2 reflecting a weak trend, but ADX numbers are rising. DI Differential is well below 5.00. MACD is bearish crossing down below the zero on the histogram and adding divergence from below the signal line and Stochastics are in deep oversold territory, so technically watch for a correction up. For bear price action we will need to see a break below $84 and a retest of $83.
On the weekly chart we see ADX dropping to 44 telling us that the previous very strong uptrend has weakened, but this is still a strong trending market. The strong uptrend started mid-September as the price action rose above $75.000.
Proceed to Page 2 for the latest COT Data...
COT Data
You can see how “big money” on the Disaggregated COT report began posturing for higher prices in hogs when Producers started adding to net shorts and Managed Money started adding to net longs. We even saw Swap Dealer add to net longs in December. As of Friday, Producers were net short -103,999 contracts, Managed Money was net long 54,006 contracts, and Swap Dealers were net long 59,092.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.Commercial Net Tracker instructions: This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals...
Fundamentals
You can see from the chart below the pork production estimates for 2013 by country. These look to be the top ten countries for 2013. The past WASDE report released on Friday had this to say in the last line on lean hogs, “Hog prices are forecast lower based on larger expected supplies.” Make sure you keep an eye on “big money” to see their take on this, it might be different.
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