The lean hog futures have staged a nice rally this week based at least partly on demonstrated and expected strength in the cash market. We still have a long way to go to get most hog producers back to profitable levels, but this is far better than the price levels we have been seeing for some time. The grain and oilseed markets have rallied nicely in Monday's trade. The markets are running into trouble on Tuesday, and that is not surprising. With the increased prices there was a surge of farmers selling corn and that is making it difficult for the corn futures to rally.
Weather continues to be good in wheat.
In the soybean complex, it is a matter of a very bearish set of fundamentals that are already present, and the expectation of a substantial increase in acreage again when the March 31 Prospective Plantings report comes out. Producers with substantial price protection at higher prices ought to think about moving up to 50 percent-60 percent protection on such rallies. In soybeans, where we are seeing a similar pattern, I have much the same attitude. The November futures rallied nicely on Monday but are faltering in Tuesday's trade. Keep in mind that if you plan on using the loan rate or loan deficiency payment, there is nothing wrong with selling rallies in this market with the idea that if the bearish scenario does work itself out, then there will be some profit accumulation in these hedge accounts.