Walsh Trading Daily Insights
Commentary
December Lean Hogs had a strong open and never looked back. It opened above resistance at 77.80, making the low just above it at 77.90 and rallying to the session high at 79.875. The high was just above resistance at 79.80 and the market pulled back, consolidating and then settling just below resistance at 79.60. The October contract expires at the end of the week and December becomes both the lead contract and the spot contract. December is trading at a huge discount to the cash so, in my opinion, it is playing a little catch-up to where the cash market is. The settlement price and the index put the discount to cash at 13.05. It is normally around 3.00 – 4.00 handles below cash at this time. Don’t forget, the Hogs and Pigs report showed the industry is not expanding. African Swine Fever is still infecting herds across the world. Bird Flu is here and starting to mess with poultry supplies. Continued progression could be supportive to the hog market as we near the holidays. A rally past resistance could see price test the 80.45 resistance level. Resistance then comes in at 81.70. If price fails at settlement, we could test support at 78.80. Support then comes in at 77.80.
The Pork Cutout Index increased and is at 99.98 as of 10/07/2022.
The Lean Hog Index decreased and is at 92.65 as of 10/06/2022.
Estimated Slaughter for Monday is 488,000 which is above last week’s 465,000 and last year’s 474,000.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays (except holiday weeks) and our next webinar will be on Thursday, October 13, 2022 at 3:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
tested support at the
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.