October Lean Hogs gap opened lower on Wednesday and traded to the low of the day at 79.525. The low was just below support at 79.80 and had bears chomping at the bit. Instead they bit their tongue as bulls gored the shorts and price rebounded, closing the opening gap. The market stalled and then bulls took over at mid-session and took price higher the rest of the day. It made the high at the end of the session at 83.825. The rally caught bears off guard as cutouts were lower on the morning report and the indices have been in a freefall. Analysts are guessing the rally came about as weights cratered last week, down 4 # from the prior week. They may be assuming that packers were pulling hogs forward and will leave the market tight in the near future. It could also have been just because of last week’s extreme heat so stay tuned for next week’s weight report. Lows are also put in late August/ early September. Whatever the reason, the price action put Hogs on better footing for bulls, taking out the Friday high and not crashing to a new low. Settlement was above resistance at 83.325 and if Hogs hold settlement, it could test resistance at 85.325. A failure from 83.325, could lead to a re-test of the 81.70 support level. Support then comes in at 80.45.
The Pork Cutout Index fell and is at 97.17 as of 8/29/2023.
The Lean Hog Index decreased and is at 92.41 as of 8/28/2023.
Estimated Slaughter for Wednesday is 468,000, which is above last week’s 464,000 and below last year’s 478,000. Tuesday’s slaughter was revised higher to 476,000. The estimated slaughter for the week (so far) is 1,420,000, which is above last week’s 1,411,000 and below last year’s 1,440,000.
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, August 31, 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
888.391.7894
Fax: 312.256.0109
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