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The
GCA Insider is a free weekly report
courtesy of Kevin Kerr's Global Commodities
Alert service. Every Thursday, the
report delves deep into a specific fuures market
to provide readers keen insight into what makes
that particular market tick. It is our
sincere hope that these reports help readers
become better, more informed traders and entices
you to visit www.kerralert.com
to find out about Kevin Kerr's premium trade
alert service, GCA.
An
Insider's View of
Lean
Hogs
Hogs - or pigs - are the often underestimated and
humble livestock that have likely been
domesticated for thousands of years. A global
source of meat believed to be descended from the
wild boars of Eurasia; pigs are unique in that
they are likely livestock for settled farming
communities rather than nomadic peoples since
they are not easily herded for long distances.
Pig, swine, shoat, piglet, boar, hog, stag,
gilt, sow, or barrow; no matter how you describe
them, these animals are an integral part of food
and economics for many countries across the
globe.
Contract Size - 40,000 lbs
Price Quote & Tick Size - cents per
pound; minimum fluctuation is $.00025 per pound
($10 per contract)
Contract Months - February, April, May,
June, July, August, October, December
Trading Specs - Floor trading is
conducted 9:05 am to 1:00 pm CT; Globex trading
Mon-Thurs 9:05 a.m.-4:00 p.m. Shutdown period
from 4:00 p.m.-5:00 p.m. Re-open 5:00 p.m.-4:00
p.m. Friday Close at 1:30p.m. CT
Daily Price Limit - $.03 per pound above
or below previous day's settlement price; none
for expiring contract in last 2 trading days.
Trading Symbols - LH; HE on
Globex
**chart
courtesy of Gecko
Software
Lean Hogs Facts
A larger percentage of hog production occurs in
the Midwestern United States and the largest
individual state production falls to Iowa, North
Carolina, Minnesota, and Illinois.
Globally, production, consumption and exports
are distributed as shown:
**Data courtesy of USDA
**Data courtesy of USDA
**Data courtesy of USDA
Key
Uses
The obvious end use for lean hogs is meat (pork)
however; the hide, hairs, and lard are also
useable products.
Key
Concerns
In addition to the following variables, if you
are trading lean hogs, you will also want to be
aware that the USDA issues a Quarterly Hogs and
Pigs report that details domestic hog
inventories, as well as the birth rate (a farrow
is a litter of pigs or, as a verb, means to
produce a little of pigs) and litter sizes for
breeding sows.
Health: There are well over one hundred
diseases and conditions which can affect hog
health but many can be treated, managed, or
controlled.
Feed Costs: Higher feed costs -
particularly corn - can typically affect the
weight and rate at which a farmer will take hogs
to market. If farmers were to bring more hogs to
market at lower weights to save on overall feed
costs, this can to increase supply and possibly
depress prices.
Domestic and International Demand: Like
other livestock, there are regional and
religious preferences which can impact the
demands for pork. Certain advertising campaigns
can work to increase consumption and any health
concerns associated with one type of livestock
can possibly result in a substitutive demand for
another. Trade agreements and available markets
for US exports are also of fundamental interest
as well as the recent suggestion that increasing
wealth in developing nations also increases the
regular consumption of meat.
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Disclaimer: There is risk of loss in all
commodities trading. Losses can exceed
your account size and/or margin requirements.
Commodities trading can be exremely risky and is
not for everyone. Some option strategies
have unlimited risk. Educate yourself on
the risks and rewards of such investing prior to
trading. Futures Press, Inc., the
publisher, and/or its affiliates, staff, or
anyone associated with Futures Press, Inc., or www.kerralert.com,
do not guarantee profits or pre-determined loss
points, and are not held monetarily responsible
for the trading losses of others (subscribers or
otherwise). Past results are by no means
indicative of potential future returns. Options
DO NOT necessarily move lock-step with the
underlying futures contract. Information
provided is compiled by sources believed to be
reliable. Futures Press, Inc., and/or its
principals, assume no responsibility for any
errors or omissions as the information may not
be complete or events may have been cancelled or
rescheduled. Any copy, reprint, broadcast,
or distribution of this report of any kind is
prohibited without the expressed written content
of Futures Press, Inc.
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