July lean hogs have rallied more than 13% since the May lows. This has also been a textbook seasonal trade with July hogs rallying into early June and should sell off through the middle of July into expiration. The commercial traders have had their way this market, buying the May lows and now, selling the June highs.
Yesterday’s action was indicative of a technical top as the market posted a new high for the run yet, closed below the previous day’s low.
We’ll tie that into strong commercial selling as they have shed more than 25,000 contracts in the last three weeks. We are selling July lean hogs and placing a protective buy stop above yesterday’s high at 94.00.
