Commentary
June Lean Hogs opened higher, broke down and then reversed course and traded to the session high at 92.75. This was just above resistance at 92.375 and it couldn’t hold here and broke down off the high. It continued lower the rest of the session to the low at 89.25. It settled near the low at 89.575. The breakdown took price below support at 90.40 and then the declining 200-DMA now at 89.60. It was a bad day for bulls with the settlement below these support levels. It also took price below the ledge as traders are becoming more frustrated with the cash markets inability to stage any kind of lasting uptick. The indices continue to work lower and today’s weaker morning cutout price was the straw that pressured price for the day…. With exports solid, US demand must be the problem, in my opinion. Prices are well below last year as we head into grilling season and we must see a turnaround soon as we should be heading into a high demand period for pork. I continue to believe retailers are keeping prices elevated for pork and this is hindering demand. If pork were cheap in the groceries, like it is here, then it would be flying out of the coolers, that doesn’t seem to be happening, in my opinion. If Hogs can hold settlement, we could test resistance at 90.40. Resistance then comes in at 92.375. If settlement falls, we could see support tested at the rising 21-DMA, now at 88.775 and then 88.325.
The Pork Cutout Index decreased and is at 78.94 as of 04/03/2023.
The Lean Hog Index declined and is at 75.20 as of 03/31/2023.
Estimated Slaughter for Tuesday is 481,000, which is above last week’s 480,000 and even with last year. The estimated total for the week (so far) is 966,000, which is even with last week and above last year’s 959,000.
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, April 06, 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.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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