June Lean Hogs opened lower and broke down to a new low for the down move at 96.425. Hogs found support here and reversed course in a big way, surging to the high at 100.10. Hogs couldn’t handle success and broke down into the middle of the range and settled at 98.375. The rally took price above the rising 50-DMA now at 99.80 and resistance at 100.075. The opening breakdown took price below support at 97.30 and the mid-morning pullback below the key level at 98.475. Disappointing export sales sent the market lower on the open, with strength in the cattle markets and a realization the cutout and cash indices were higher leading to the reversal in fortune on the rally, in my opinion. The pullback came as the morning cutouts came in lower, putting a damper on the enthusiasm futures traders showed on the rally. More disappointing news for hogs as the afternoon cutouts were lower which could further disappoint traders. We do have seasonals that could still help push cutouts and cash higher as we move towards summer, but so far slaughter is staying high and the cash markets are grinding higher which is in my opinion a disappointment to traders, in my opinion. We’ll see!… The new low and the reversal keeps hogs in its consolidation band with the new low the low of the band and 100.55 the high. If futures get above 98.475, it could revisit resistance at 100.075. A failure from settlement could see price re-test support at 97.30 and then the Thursday low. Support then comes in at 95.30.
The Pork Cutout Index increased and is at 100.85 as of 05/15/2024.
The Lean Hog Index increased and is at 91.76 as of 05/14/2024.
Estimated Slaughter for Thursday is 480,000, which is above last week’s 477,000 and last year’s 466,314. The estimated total for the week (so far) is 1,421,000 which is below last week’s 1,436,000 and above last year’s 1,402,022.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, May 21, 2024, 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.
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