December Lean Hogs continued on its path of lower prices, gaping lower on the open and continuing lower till late morning, making the low at 69.325. It limped into the close and settled at 69.50. The high was at 71.375. The gap is from the September 29th low at 71.775 to Monday’s high. The selling pressure continued as traders remain perplexed over the Quarterly Hogs and Pigs report. I think expectations were for a bullish surprise and the stronger results than expected just had traders punishing futures. Hog slaughter was strong last week, forcing traders to assume the seasonal increase in supply and resulting potential weakness in cash and cutouts may be pronounced going forward. They must be thinking that, because December futures are trading at a large discount to the cash index. Settlement was below support at 69.90, this indicates continued weakness and puts support at 68.75 in traders’ crosshairs. Support then comes in at 67.80. The breakdown to the new low for the down move stalled and drifted after making the low. Bulls hope that this is an indication of futures being oversold at these levels. Price kept moving above and below the 69.90 key level. If price can retake 69.90, a test of resistance at 71.325 is possible. The gap is next and we have resistance near the gap close at 71.85.
The Pork Cutout Index was unchanged and is at 97.80 as of 9/29/2023.
The Lean Hog Index decreased and is at 85.58 as of 9/28/2023.
Estimated Slaughter for Monday is 486,000, which is above last week’s 469,000 and last year’s 466,000. Saturday slaughter was revised lower to 203,000, which is still above last week’s 121,000 and last year’s 111,000. The estimated slaughter for the week (so far) is now 2,599,000, which is above last week’s 2,537,000 and last year’s 2,485,000.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be on Tuesday, October 03, 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
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.