wmeubank@ocp.kcmo.com
ALLENDALE, INC
4506 Prime Parkway, McHenry, Illinois
(November 7, 1997) HOGS: GOT ANY NEW SEASONAL TRADES?–“You bet we do,” says Allendale broker, Dan Darst. Buy April lean hogs and sell May pork bellies the first week of November and exit the spread in the middle of February for 87% probability of profit. Enter on November 7th, exit February 11. The objective is $1600 or February 11, which ever comes first. Probability of profit is 13 out of 15 years or 87%. Average profit in profitable years is $1774. Probability of loss is 2 out of 15 years or 13%. Average loss in losing years was $568. Average net profit per contract is $1462. We will enter the trade on Monday. Wow! Wow! How about that new life of contract highs in the December meal, December oil and January beans. How about $260 SMZ? Get ready for Monday. A weak cash trade due to record hog weights kept prices steady to .25¢ lower. Retailers have begun to change their cooler space over to seasonal items. Veterans Day may cause two large packing plants to shut down, possibly losing 27,000 kills for next week! #2 cutouts fell .88, while USDA slaughter approached 367,000. A week ago, there were 374,000 and 365,000 one year ago. Hams weren't tested, while loins fell 1 to 4 lower and bellies remained steady for the day. December lean hog futures validated the bearish triangle formation by beginning the move which may reach 59.55.
Rich Nelson
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