THE WINDY CITY TRADER
P.O. Box 1673, Chicago, Illinois
800-443-2360(November 30, 1999) HOGS: The rally in bellies and hogs continues unabated. This complex is a great example of how just a small change in fundamentals and psychology can affect prices. A year-ago December futures reached near .20 a pound and cash prices were at .08 a pound. More hogs were produced this year than last and demand has been a meager 4-5% above last year. Does that mean that last years prices were too low, or that this year they are too high? It's probably a little of both, but it's hard to stop a locomotive when it gets going. That said we do expect the current hog move to last at least through December. February hogs look set to test resistance between 60-62 and February bellies look driven to test 90. At that point, we will look at these as overvalued commodities and look for a healthy correction.
Stephen Connell and William Frejlich
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