wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
375 W. Madison, Ste. 2607, Chicago, Illinois
(November 20, 1997) HOGS: The pork complex was fairly strong during the past week as the main supporting factor was decent packer demand as they found the need to kill all the hogs possible as their margins have moved into a territory that they are making nice money. The cash market ended the week with hog tops quoted at $46.00 to $48.00, which was steady to $1.00 higher. The product sector also showed continued life as most sectors continued higher with talk that the new found demand could have a lasting presence through the end of the year. Overall, market internals are maintaining a positive stance due most in part to the fact that the hog runs are not large enough to kill the packers need of killing at full capacity fulfilled. If they continue to want to keep slaughter levels at the current pace they will end up pushing the cash market a lot higher or at least until they end up cutting kills due to poor margins, which will keep the market riding a fine line for now. Technically, December lean hogs are in a downtrend, they would turn back up on a close above $64.15.
FUTURES STRATEGY–Long LHZ at $61.77. Maintain a protective sell stop close only at $60.00.
OPTIONS STRATEGY–Short LHZ $60.00 puts at $.90. Maintain a protective buy stop at $2.15.
Tony Montini
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