LEAN HOGS The USDA will issue their monthly cold storage report today at 2:00 Chicago time. Lean hog futures closed higher Friday on active trade reported at over 28,000 contracts with total open interest up 1,370. The trade in my opinion is beginning to realize that pork demand is recovering from the flu scare. Recent troubles have been on the supply side of the pork equation with slaughter rates coming in above expectations. I attribute this to a combination of backlogged hogs during May, excellent growing weather during May and early June with nighttime temperatures very cool and with the possibility that gilt retention is near zero. The other possibility from the supply side is the theory that hog numbers were overstated on the latest hog & pig report. By the way, the next quarterly hog & pig report will be released Friday afternoon. I have no positions in the hogs. I’m bullish and not interested/willing in trading from the short side. My latest strategy is looking to the bull hog spreads. If July hog futures should happen to gap higher today, (above Friday’s session high (6210), it would be, if left unfilled, a 13-day island bottom formation which I’d consider very bullish.
