LEAN HOGS Lean hog futures closed lower to sharply lower on Wednesday. There was no real feature in the spreads with the summer and fall contracts all 200 to 220 lower. The selling of futures appears to be tied to several items. First, the strength in the dollar could prove to be a depressant for pork export sales. Second, it appears the problems in Europe might slow our economic recovery. Third, it appears the speculative money is beginning to slide out of the hog market. Fourth, seasonally, it’s normal for hog futures to top at this time of year. And fifth, I’m starting to pick up a lot of packer resistance to higher prices as processing margins have been squeezed. I’ll be approaching rallies from a cautious, hedging standpoint from here forward. On the other side of the coin, I’m still hearing that packers will be looking for hogs for next week, cash bids for next week will be firm to higher and product still has upside potential.
