Re: which pork prices to use

[Ted Stampeen <cstampeen@xxxxxxx>]

 ALSO, one has to keep in mind that the Commercials use the "MARKET" in a
different way, they are the ones "selling "
into the rallies, and" buying "on falling prices.. They have their own
program going on, and also they aren't the only producers,
so they could be doing something totally different then the other producers
because it "fits" into their plan at the time..

 Analysts' , are  number crunchers for their" brokerage house",etc, they
pour over the data , be it technical, fundamental
 or both, put together their "take on it", buy it, sell it, then recommend
to their clients .. Some obviously are better then others,
  but either way, right or wrong, they get paid..

 Bellie futures, due to the "lack of liquidity", has to be one of the most
manipulated markets there is, 'tis very easy for the floor
 to go gunning for the "stops", as you probably know, .so one will have to
sit thru a lot ,  have "deep pockets" and "nerves of steel".

 so put all together (in my opinion), one would be better off hedging the
stock with an  "at the money" or as close to the
 underlying price with an"option",  of course it all depends on ones
strategy and account size etc.

  just my 2 cents , goodtrading / Ted





> >Given one is of the opinion that the insiders know something the
Analysts'
> >don't, which is often the case :-)
>
> Often true, but sometimes they are just getting closer to flat rather than
> getting short. By definition and necessity they may be "long" the
underlying
> cash product which they can't sell as easily as the futures.
> Maybe your hog hedge is based on hedge(d) hogs.
>
> >
> >I'd like to see how useful a hedge using "pork" futures might be, and I'd
> >appreciate suggestions as to which is the most indicative contract of
pork
> >prices. For example Smithfield Foods (SFD) is one of the world's largest
> >pork processors and hog producer. Recently the price moved to news highs,
> >however, the insiders at the company have been selling into the momentum.
> >Going against the trend if you will.
> >
> >Given one is of the opinion that the insiders know something the
Analysts'
> >don't, which is often the case :-), which pork futures contract could be
> >most useful to buy to cover a short sale of SFD? (I'd also expect to
factor
> >in the value of a futures contract and ratio its volatility in relation
to
> >SFD's volatility).
> >
> >Thanks in Advance
> >Colin West
> >
>
>