wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W Madison, Ste 2607,
Chicago, Illinois
(June 12, 1997) LIVE HOGS: The pork complex ended the week on a sour note as a lack of product demand continued to play havoc on prices despite the lack of a hog supply. The cash will end the week at steady to $1.00 lower versus a week earlier as hog tops are trading at $56.00 to $58.00. The packers were again the story as it appears they anticipated some upfront demand and paid up to get supply, but as of now there has been no uptick in demand. The product market was very weak as the smaller slaughter did not help this sector as expected and without demand the weakness should continue. Overall, market internals are in a mixed to weak state, but if the packers cut back on the kill it might save the product market for a short period, but do not expect miracles. Demand will be the key if the market has any chance to turn and move higher and as of now it does not appear possible. Technically, August live hogs are in a downtrend; the trend would turn back up on a close over $81.25.
FUTURES STRATEGY--Short LHQ at $79.75. Maintain a protective buy stop close only at $81.57.
OPTIONS STRATEGY--Short LHM $90.00 calls at $.90. Maintain a protective buy stop at $2.10.
Tony Montini
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