wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(November 18, 1997) HOGS: SHORT TERM–Fund short-covering is supporting the market. An improvement in cash pork prices, good packer demand and an improving chart picture look to provide support to the hogs for the near term. Hog runs have tapered off a bit in the last week or so. Weakness in bellies has been a negative. Seasonals support higher prices.
RESISTANCE–Resistance basis December lies near 6345, 6400, 6500.
SUPPORT–Basis December lies near 6300, 6272, 6200, 6160, 6100, 6000, 5960, 5890, 5850.
RECOMMENDATION–Aggressive traders could consider buying December hogs in the mid-upper 6200's with stops under 6180, 6130 or of 50-100 points. Look for a test of the 6400 area. We've seen quite a bit of selling in this market, so short-covering may be more of a feature on rallies. If the funds decide to blow out of positions, the upside could be a bit higher than expected. Option traders could consider buying February. calls on dips from current levels for an eventual rally to the 6400-6500 area.
M. Steven Morgan
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