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Lean Hogs Futures

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HE1! trade ideas

Hogs: Dealing with a logarithmic vs. arithmetic discrepancy My long trade is the assumption that the breakdown on the log chart is a false breakout. I trade based on LOG almost entirely, but there is a mixed bag of data here that leads me to believe it is worth considering both metrics (log vs arithmetic). Many traders dislike trend lines - this is just one of those reasons among many. The way I deal with these situations is to analyze them horizontally and see which levels are violated from there. From the horizontal perspective price is at an attractive symmetrical level as shown in purple. I am a cautious buyer here. My stop is relatively wide because $5.4 per pound ($54 per 100 weight) would still register as a buy.
CME:HE1!
by Lanmar
Lean Hogs - After every rain the sun returns...Instead of looking the curve of the price for lean hogs in the short term, which shows a most obvious down since July 14, I noticed that in the long term this market is in a Bull-Trend from 1999. The consumption of the porcine meats has constantly increased in the last 10-15 years, favoring also a grow of the US meats production, that has reached industrial levels. In the short term the market’s still reacting to a negative data series. After the containment of the PED virus that has carried to the exorbitant prices in July, the demand has clearly diminished and at the same time the production increased. By now the market has reached the lowest level since more than 5 years and it does not seem to want to change direction. Last week the USDA has recorded an increase of the +6,2% slaughterings to 2.26 million heads, an ulterior negative factor for the prices. The wholesale domestic demand of porcine meats has literally collapsed and reached the lowest level since 2010. Foreign demand has weakened as well: between January and November the exports shrunk by -1,7% to 4.46 billion pounds. Short term the trend’s unquestionable down and can carry us straight until 40 cents/lb. But, analyzing the historical trend from 1999, the lean hogs futures are exactly on the support line, that gives us a purchase signal. Like in 1998, 2002 and 2009 the market could suddenly change direction, also in total absence of positive fundamentals. If my supposition’s exact, the hours of the reduction are counted… “after every rain the sun returns…” More Commodity Reports on: www.swisscommodity.com
CME:HE1!Long
by swisscommodity.com