Hog markets traded higher today with exception to the February contract, which settled 20 cents lower at 78.45 on the day. The April contract traded as high as 89.075 but back off, settling at 88.125, 85 cents higher. Some traders are seeing cash hogs starting to form a bottom which may be the reason why there is some support in the market. Contrary to the bulls, there is now prominent reversal pattern or indicator for the near term as the hog index was down $1.15 on Friday and Monday’s quote slid even further, down another 16 cents to $74.18. Last week’s hog estimates total was revised lower to 2.684 million head, 4,000 lower than the original estimate but still well above the figure a year ago by 13%.
The February contract had three straight sessions of higher lows for the first time since late December so a technical bottom may be forming down around the $78 dollar level. The first level or resistance in my opinion will be around $84 price level and if there looks to be some strong packer demand then I believe that $88 is the next price target. For right now though it seems that there needs to be a more clear indication that cash hogs have found their bottom before the bulls jump in and drive prices higher.
Feb Hogs
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