August Lean Hogs gap opened lower and rallied to close the gap as it raced to the session high at 91.925. The success didn’t last long and price broke down to the session low at 90.65. The rally stalled just below resistance at 92.375 and the breakdown to the low stalled just above support at 90.40. After making the low, the market rallied and settled near the high at 91.375. The settlement price was in negative territory however. The cash market is stabilizing as cutouts are moving higher and the Lean Hog Index also looks like it has found some support. The cutout starting to move higher is good news as the beef cutout has started to falter. It looks like US demand is starting to improve as exports have been erratic lately, in my opinion and that seemingly is helping the cutout move higher. We could see some consolidation between the 92.375 and 90.40 as traders try to determine if the cash rally can sustain itself. This rally in the August contract has helped the deferred contracts as they have been pressured lately. There are longer term issues for Hogs as we move through summer into the fall but it is good see price rebound in the near term which could give producers an opportunity to put some downside hedges on. We’ll see!… Maybe this recovery can push August past resistance to the declining 50-DMA now at 93.075. Resistance is close by at 93.50. If settlement fails, we could revisit the low and test the 90.40 support again. Support then comes in at the declining 21-DMA now at 89.025.
The Pork Cutout Index increased and is at 98.63 as of 07/17/2024.
The Lean Hog Index increased and is at 88.80 as of 07/17/2024.
Estimated Slaughter for Thursday is 475,000, which is even with last week and below last year’s 476,248. The estimated slaughter for the week is (so far) is 1,909,000, which is above last week’s 1,890,000 and last year’s 1,860,000.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, July 23, 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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