funny guy; I know what the cattle crush is......supposedly you will reduce your trade variance by adding 2 more components but lately is that the case?
Check oct fatig spread, getting very outta whack. Also in relation to corn any rally should be met with huge farmer selling, there is a lot of corn in the bins from last year and they are goin to have to make room for a 160 crop
I went ahead and extended the LC forecast out through 09/21. It helps me more than anything, and helps me stay accountable. If I'm wrong, I won't be able to hide it. I'd say it helps to keep me honest. Anyhow, I took the liberty of smoothing the forecast, to eliminate the noise. I also made an addition in the form of a specific, seasonally-weighted forecast. I just decided to keep running the LCQ09 price data, as it was easier on me, and the price isn't the important part of the forecast, it's the swing highs and lows. This forecast is the same from previous posts, it has just been walked forward another 35 data points. The seasonally-weighted forecast and the origional forecast diverge at the end of August, for about 10 trading days, +/-. I guess we'll see which one is true at that point. They then get back on track with one another, and show an upside bias. All I can really say is there's a high probability setup to take a long position here towards the very end of the week, or early next week. It would probably be best to wait and see what the cash market does before hopping in. At the point where the 2 forecasts diverge, there is an opportunity to leg into the V/J spread. I'm looking to initiate the long side with the October contract for the upcoming outright trade, and leg into the short April side during the last full trading week of August. Feel free to let me know if this thing ends up being totally wrong. Peace -C.
yea its a lot of spreading against Dec from both the Oct and Feb. The decline in hogs should end next week, but I also think they'll continue to spread against Dec.
I wonder if all of this talk by the CDC about a Swine Flu epidemic will come to fruition this fall/winter. If so, hogs will be an albatross around the meat market's neck.
eh...not a big deal...nobody wanted to buy a lock limit last week that close to FND, and we've been in delivery all week this week, who would step in to buy with no decent chance of being able to get out? Feb holding nicely @ 79.50ish (+/- 50cents), we'll see if the selling eventually moves out to that month, but given the reasons above, I kind of doubt it, at least in the near term. Hogs should start catching at least some type of a bid down here. Packers have room to bid higher, their margins have expanded greatly in the past few weeks.