Commentary
April Lean Hogs opened higher and once again tanked, trading down to a new low at 81.275. It reversed course and rallied to the session high at 84.075. It pulled back and settled at 83.275. The new low tested support at 81.70 and the rally took price past resistance at 83.325 and the nearby 21-DMA at 83.70. Settlement was below resistance so it keeps the onus on bulls. Traders are feeling the cash market is carving out a bottom, but cutouts and cash trading remain erratic, up one day and down the next. Cash has not gathered steam and slaughter levels remain higher than producers want and the Hogs and Pigs report indicated, in my opinion. If Hogs hold settlement, we could test resistance at the 100-DMA now at 84.60. Resistance then comes in at the declining 85.325. A failure from settlement could see price re-test support at 81.70. Support then comes in at 80.45.
The Pork Cutout Index increased and is at 80.27 as of 02/06/2023.
The Lean Hog Index increased and is at 73.29 as of 02/03/2023.
Estimated Slaughter for Tuesday is 479,000, which is below last week’s 483,000 and above last year’s 469,000. Monday’s slaughter was revised lower to 480,000. The estimated total for the week (so far) is 959,000, which is above last week’s 958,000 and last year’s 948,000.
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, February 9, 2023, 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
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