Open Interest Down on Lower Hog Futures

By Dennis Smith | Grain PhD Ag Risk Specialist


Cash hog prices are stabilizing after a historic break that started over four weeks ago. Cash was steady to down .50 yesterday. Futures are premium to the cash with the latest index at 5151 and Oct futures posting a settlement yesterday at 5647. Volume on yesterday’s reversal and break was large at 66,700 with open interest declining by 4,900 cars. The cutout was up .41 which is nothing compared to the losses of recent in the hog carcass. Look for additional selling pressure early today in the front end with the bull spreads most likely under pressure. With the ASF situation unfolding in China, the winter, spring and summer contracts are going to find support, lots of support. Recommend covering short hedges in the Feb and April while holding hedges in the Oct and Dec.


There’s not much happening in the cattle world this week. The show list is a bit smaller but packers appear compelled to buy cattle at lower money again this week. At least that’s what we are hearing through our grapevine so far. The beef is solid and impressive with choice up $2.60 last night. Consider hedging fall production if/when the Oct pushes up above 111.00. Volume was light at 44,000 with open interest down 800. Again, there’s just not a lot happening right now in the beef sector.

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2018-08-21T13:53:33+00:00 August 21st, 2018|