COMMODITY REVIEW AND OUTLOOK

195 Route 6A, Suite 6, Orleans, Massachusetts

(October 16, 1997) HOGS: SHORT TERM–Cash hogs may continue to run into pressure this week if the rains encourages farmers to market hogs. Demand has not been as good as hoped for. Seasonal lows should begin to appear in the December hogs in the near future. Recent action suggests a low is near.

RESISTANCE–Resistance basis December lies near 6200, 6272, 6300, 6400, 6555-6600, 6670-6705, 6770, and near 6820.

SUPPORT–Basis December lies near 6100, 6040- 6080.

RECOMMENDATION–Aggressive short-term traders might buy December hogs on dips to the mid-low 6100's with stops of 50-100 points, looking for an eventual rally to the 6500 area. Watch for potential selling to appear in the mid-6300's. Option traders could consider buying December calls at current levels.

M. Steven Morgan

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