December hogs traded on lower volume today but did fill the gap that was made from yesterday’s open. With the concerns about reduced exports for US pork were certainly justified earlier this year but shipments showed a surge since mid-August. This could be due to the sustained strength of the Mexican peso, given the country’s strong demand for US hams. Based on the October futures strong mid-week rebound suggests traders view the recent rebound in pork cutouts as renewed cash strength which should give some more support to the market.
The December hog chart seems to be making its way back to the 62% retracement level around $79.35. The 40-day Exponential Moving Average comes in at $82 which is also the 38.2% retracement level and, in my opinion, would be the next upside target to look at.
The USDA estimated hog slaughter numbers that came in yesterday showed 489,000 head yesterday. This brings the total for the week so far up to 1.928 million head, up from 1.927 million last week and 1.905 million a year ago. US pork export sales for the week ending Sep 29 came in at 34,272 tonnes which was slightly below the 34.414 tonnes the previous week and above the 4-week average of 30,681.
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