June 30, 2009
US lean hogs continue to trend down; new lows
Chicago Mercantile Exchange August lean hog futures on Monday (June 29) established another fresh contract low of 57.40 cents a pound.
Prices have been trending solidly lower from the July 2008 contract high of 96.00 cents. There are no early near-term technical clues to suggest a market bottom is close at hand.
For perspective, nearby hog futures prices in 2008 scored a low of 53.90 cents. In 2007, the low in nearby hogs was 50.65 cents. In 2006, the low was 53.55 cents. In 2002, nearby lean hogs scored a low of 29.40. Just 10 years ago, in 1999, nearby lean hog futures scored a low of 20.70 cents a pound.
The next downside price objective for the still-powerful hog market bears is to push and close August futures prices below solid technical support at 55.00 cents. Above that level dies lie technical support at the contract low of 57.40, at 57.00, 56.50, 56.00 and then at 55.50 cents.
The lean hog market bulls would begin to gain some fresh upside near-term technical momentum by pushing and closing August futures prices above solid technical resistance at 60.00 cents.
