Prediction
Lean Hogs are likely to rise over the next 2-4 weeks as Commercial Hedgers' bullish positioning and Managed Money's bearish stance diverge significantly.
Commercial Hedgers at 100th percentile · Managed Money at 0th percentile · 5-year range.
Key points
- Commercial Hedgers — 100th percentile, Managed Money — 0th percentile
- Open Interest -5.7% month-over-month
- Commercial Hedgers' positioning increasing for 7 consecutive weeks
Why it matters
The convergence of Commercial Hedgers at the 100th percentile and Managed Money at the 0th percentile suggests a strong bullish signal, as smart money is positioned for a potential price increase. Typically, when Commercial Hedgers and Managed Money diverge by this magnitude, the market tends to follow the smart money's lead, leading to a potential price increase in the near term.
What confirms the thesis
Commercial positioning stays elevated and Lean Hogs holds or reclaims its recent range.
What invalidates the thesis
Commercial accumulation fades quickly or Lean Hogs breaks to fresh short-term lows.
For informational purposes only. Not investment advice. Disclaimer.