Commentary
February Lean Hogs continued its stumble, trading down to another new low for the down move at 78.825, making the high at 80.15 and settling at 79.30. The rally to the high couldn’t challenge resistance at 80.45, falling short and then breaking down to test support at 78.80. Cash markets continue to weaken and futures are following along. Producers are struggling and packers are doing just a little better as the Sterling Profit Tracker is showing producers from farrow to finish losing $24.19 per head the week of Jan 7th and packer margins in the black by $9.32/ head for the same week. Nothing exciting to see here. A potential way down the road positive for the US is that due to the insane climate change agenda in the EU rumors are certain European countries (Sweden, Denmark the Netherlands for example) in order to meet emission regulations will impose a tax or an outright ban on meat production starting in 2025 (taxation then ban by 2030??). Weird! They will force consumers to eat highly processed fake meat products or here is where the US could benefit they will have to rely on imported meat. Some crazy stuff out there…. What I want to know is when these same people who argue against meat consumption will attack people for eating plants… because they have feelings too!!! Nutty! Then eat bugs… oh no…. bugs are living things waaaa… Sorry, just makes me see stars sometimes when I see this stuff. If Hogs hold settlement, we could test resistance at 79.90. Resistance then comes in at 80.45. A failure from settlement could see price re-test support at 78.80. Support then comes in at 77.80.
The Pork Cutout Index decreased and is at 83.57 as of 01/10/2023.
The Lean Hog Index declined and is at 76.44 as of 01/09/2023.
Estimated Slaughter for Wednesday is 490,000 which is above last week’s 475,000 and last year’s 431,000. Tuesday’s slaughter was revised lower to 458,000 from 467,000. The estimated total for the week (so far) is 1,433,000, which is above last week’s 933,000 and last year’s 1,331,000.
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, January 12, 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.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
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