July Lean Hogs opened higher rallied to an early high and then broke down to the session low at 91.275. It reversed and rallied to the session high at 93.275 by mid-morning. It consolidated the rest of the session and settled near the high at 92.975. The trade on Thursday lead to an inside candlestick, trading within the previous day trading range. The breakdown to the low tested support at 92.375 and the prior day’s low at 91.80. The rally was sandwiched between resistance at the rising 100-DMA now at 93.125 and the 93.50 resistance level. Exports were good for this time of year at 29,900 MT well above the 5-year average for this time period at 22,600 MT. China was the leader at 8,900 MT followed closely by Mexico at 8,300 MT. However, the cash markets are stagnant, still in a trading range for cutouts from approximately 100.00 – 104.00 and The Lean Hog index from 91.00 to 92.06. This could indicate that US consumer demand has lagged so packers haven’t been able to move prices higher in a time period when they should be able to do so. Production has also been higher than expected with both slaughter and weights at high levels. This could indicate there are more hogs out there than the USDA expected for this time period and we have the Quarterly Hogs and Pigs report out at the end of the month which hopefully can clarify where we are with hog numbers. This could be another reason packers can’t get price higher and keeping producer ability to raise prices under wraps. We are still in the period where slaughter numbers are to decline and temperature levels should rise, putting pressure on weights and production. This has the potential to right the ship and get prices moving higher. We’ll see!… A failure from settlement could send price down to re-test support at 92.375 and then 91.80. Support then comes in at 90.40. If price can overtake resistance at 93.50, we could move towards resistance at 95.30. Resistance then comes in at the declining 13-DMA now at 96.025.
The Pork Cutout Index decreased and is at 101.55 as of 06/05/2024.
The Lean Hog Index increased and is at 92.06 as of 06/04/2024.
Estimated Slaughter for Thursday is 470,000, which is below last week’s 477,000 and above last year’s 458,555. The estimated total for the week (so far) is 1,916,000, which is above last week’s 1,437,000 and last year’s 1,852,000.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, June 11, 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
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