{"id":21475,"date":"2018-07-17T10:16:21","date_gmt":"2018-07-17T16:16:21","guid":{"rendered":"http:\/\/prairieswine.com\/rsc\/?p=21475"},"modified":"2018-07-17T10:16:21","modified_gmt":"2018-07-17T16:16:21","slug":"using-futures-and-option-to-manage-hog-price-volatility","status":"publish","type":"post","link":"http:\/\/prairieswine.com\/rsc\/using-futures-and-option-to-manage-hog-price-volatility\/","title":{"rendered":"Using Futures and Option to Manage Hog Price Volatility"},"content":{"rendered":"<p><strong>Author: <\/strong>Larry Martin, Ph.D.<\/p>\n<p><strong>Reference: <\/strong>Banff Pork Seminar Proceedings 2018<\/p>\n<p><strong>Summary: <\/strong><\/p>\n<p>When looking at USDA&#8217;s September 2017 report compared to the previous year, hogs were up 2%, 1% more breeding stock, and 3% more market hogs. Hog production has been on a constant incline since 2013\/2014. There are three factors that relate to the increased demand:<\/p>\n<ol>\n<li>More capacity and competition for hogs<\/li>\n<li>Domestic demand for red meat is increase, with pork seeming to be gaining on beef and chicken<\/li>\n<li>Growth in export demand. Canada exports approximately 65% of its hogs most years.<\/li>\n<\/ol>\n<p><strong>Where do we think prices are going to go in 2018? <\/strong><\/p>\n<ul>\n<li><strong>Resistance and Support Planes <\/strong>&#8211; points when the market spikes up, or down, then stops.<\/li>\n<li><strong>Key Reversals<\/strong> &#8211; occur very occasionally at life of contract highs and lows. Most reliable indicators that the market is going to move down<\/li>\n<li><strong>Fibonacci Retracements <\/strong>&#8211; occur frequently, useful as they are easy to employ on most charting packages.<\/li>\n<li><strong>Relative Strength Index (RSI) and Moving Average Convergence Divergences (MACD) <\/strong>&#8211; RSI is calculated based of the previous 14 days of prices, MACD comes from a longer series. MACD is a variable value.<\/li>\n<li><strong>Breakouts<\/strong> &#8211; when fundamental change and result in a change in price it represents a breakout.<\/li>\n<\/ul>\n<p>These factors are utilized when making pricing decisions. There is considerable uncertainty regarding hog prices for 2018 which is increased by the volatility of hog prices.<\/p>\n<p><a href=\"http:\/\/prairieswine.com\/rsc\/wp-content\/uploads\/2018\/07\/180614112720Larry-Martin-Using-Futures-and-Options-to-Manage-Hog-Price-Volatility.pdf\">Using Futures and Options to Manage Hog Price Volatility<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Author: Larry Martin, Ph.D. Reference: Banff Pork Seminar Proceedings 2018 Summary: When looking at USDA&#8217;s September 2017 report compared to the previous year, hogs were up 2%, 1% more breeding stock, and 3% more market hogs. Hog production has been on a constant incline since 2013\/2014. There are three factors that relate to the increased [&hellip;]<\/p>\n","protected":false},"author":668,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,930],"tags":[],"class_list":["post-21475","post","type-post","status-publish","format-standard","hentry","category-pork-insight-articles","category-production"],"_links":{"self":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/posts\/21475","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/users\/668"}],"replies":[{"embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/comments?post=21475"}],"version-history":[{"count":2,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/posts\/21475\/revisions"}],"predecessor-version":[{"id":21580,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/posts\/21475\/revisions\/21580"}],"wp:attachment":[{"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/media?parent=21475"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/categories?post=21475"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/prairieswine.com\/rsc\/wp-json\/wp\/v2\/tags?post=21475"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}