June Lean Hogs continued to leak lower on Monday, making another new low for the down move, trading down to 96.125 for the session low. This was after trading higher and testing resistance at 97.30 after a weaker open, making the high at 97.375. It traded both sides of unchanged after making the high and low and settled near the high at 96.925. It formed a spinning top candlestick formation, indicating indecision in the market, but settling below resistance keeps the bears in control of the price action, in my opinion. The cash market remains listless as prices are grinding and unable (so far) to take off, frustrating futures traders. Futures are still at a premium to the cash index but it is tight and cash needs to show some life to get traders to increase the futures premium. The index has basically been stagnant, hovering in the low 90s for the past month. Maybe the early strength and excitement taking price to 90, is limiting what packers are willing to pay as we move further into the grilling season. There is still time and maybe after Memorial Day, we will see more enthusiasm for pork products and drive prices higher. Cutouts are moving higher but they are also in grind mode, in my opinion. A failure from the low could send price down to test support at 95.30. If price can recover and get above 97.30, we could test resistance at 98.475.
The Pork Cutout Index increased and is at 101.36 as of 05/17/2024.
The Lean Hog Index increased and is at 92.29 as of 05/16/2024.
Estimated Slaughter for Monday is 482,000, which is above last week’s 461,000 and last year’s 472,168.
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.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
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