ALLENDALE, INC
4506 Prime Parkway, McHenry, Illinois
800-262-7538(March 10, 2000) HOGS: For the week the pork cutout finished over $1 higher and April hogs up over $2.50. Though it was hard for near-term fundamentals to indicate higher trade was due, the chart action did leave a couple clues. Yesterday's outside day (higher highs and lower lows) finishing higher is a supportive signal. Deferred contracts broke contract highs quite easily early on. The nearby April did have an intra-day gap at $61.37 which was used as a target. Without any new information from the cash market, bellies gave a mediocre performance today. We would like to go long bellies on a corrective pullback to trendline support. Seasonally speaking, we have a lot of firepower in looking for higher trade. Wholesale pork typically posts a strong showing in the first week of Apr. Not only are supplies the lowest of the season, but demand comes in as well. That is the prime time for barbeque as the days are warm and nights still cool before the summer heat sets in. For price action, nearby futures have rallied in the spring to peak in the April/May time frame in 8 of the last 10 years. Currently, Allendale remained unhedged for spring/summer marketings.
Rich Nelson
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1737 McGee
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(816) 471-3862