June Hogs continued to sell off, trading limit down briefly before slightly bouncing off the lows near the market close, settling at 106.375. I thought there would be some sort of support after Thursday’s trade which showed a potential reversal pattern but I was wrong. The volume traded today was more than the previous two sessions, although there could be some profit taking the first couple days of the week next week, I still believe there is going to be more selling in the market before it finds some solid footing and stabilizes. Fundamentally we should see a bounce in prices based on seasonal trends going into the summer grilling season and historically a drop in supply around this time of year. Conversely there seems to be a breakdown in the demand side of the market based off the export numbers and rising consumer prices, forcing consumers to look at alternative meats instead.
The CME Lean Hog Index, as of April 26th was 102.34 which was down from the previous session of 102.89. U.S. pork exports last week came in at 31,500 tonnes compared with the average of the past 4 weeks which was 26,500, but cumulative sales for the ’22 marketing year are still down 5.8% versus las year. Finally, the USDA hog slaughter numbers came in at 476,000 on Thursday which brings the total for the week so far to 1.903 million head which is slightly up from the previous week of 1.797 million.
July corn settled at 813’4 which was roughly 10 cents off the highs. I thought if corn was able to hold its gains from earlier in the session, then there would be a continued rally up to the 830’0 level. Since that did not happen, it is looking like to me that corn is finding a top around here at 820’0/815’0.