wmeubank@ocp.kcmo.com
GLOBAL ASSET MANAGEMENT
575 W. Madison, Ste. 2607, Chicago, Illinois
(December 4, 1997) HOGS: The pork complex continued to stay fixed in the sideways two-month trading range it has maintained. The market was pressured early by a weak cash hog market, but a firm product market sparked a late cash rally along with a lighter hog supply. The cash market ended the week with hog tops quoted at $44.00 to $46.00 which was basically steady from a week ago. The product sector found decent support for most of the week due to a strong ham market and decent demand for all products, especially fresh pork bellies. Overall, market internals remain into a mixed state, although the cash market has maintained the serious support level near the $43.00 level that it has now tested three times. If the area gives way it could have negative implications, but it seems when the market nears this level hog supplies ease as was the case again during the past week. Look for prices to firm if the hog run does not become overbearing for any sustained period of time. Technically, February lean hogs are in a downtrend; the trend would turn back up on a close above $63.20.
FUTURES STRATEGY–Long LHZ at $61.77. Maintain a protective sell stop close only at $60.00. Liquidate position at $64.50 if given the chance.
OPTIONS STRATEGY–Short LHZ $67.00 puts at $.90. Maintain a protective buy stop at $2.15.
Tony Montini
Hogs
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Cattle
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