December Lean Hogs opened higher, traded to the low of the day at 75.55, and then rallied to the high at 77.25. It consolidated the rest of the session and settled near the high at 76.95. The move to the low approached support at the rising 13-DMA now at 75.45 after poking through it on Wednesday. The high squeaked above Wednesday’s high but is still below the high established on Tuesday at 77.45. Hogs essentially consolidated after Wednesday’s breakdown initiated an Evening Star candlestick formation which is technically bearish in my opinion. Negating the pattern would be if hogs achieved a new high. The cash market remains in a tight range with the cutout index ranging from 94.00 to 96.00 and the cash index from 84.00 to 84.90. Slaughter continues to be smaller than the Hogs and Pigs report indicates and demand from exports and the consumer is strong. You would think with the lower slaughter production would fall, but it hasn’t as weights are still above last year, which is likely balancing supply and demand, keeping the cash prices in the tight range they have been in. The December futures have narrowed its discount to the Lean Hog Index. It hasn’t been able to break free of resistance at the 50-DMA now at 77.10 on the continuous chart however, and with the Evening Star formation still in play keeps the pressure on bulls in my opinion. If price breaks down from settlement, it could re-test support at 76.175. A breakdown from here could see support at 75.60 and the rising 13-DMA re-tested. If price pushes past the 50-DMA, we could test resistance at the Tuesday high and then 77.80. This would negate the Evening Star Candle formation and if it closes above the Tuesday high, could put bulls in control of the price action. Resistance is next at 78.80.
The Pork Cutout Index ticked higher and is at 95.06 as of 10/09/2024.
The Lean Hog Index increased and is at 84.47 as of 10/08/2024.
Estimated Slaughter for Thursday is 487,000, which is above last week’s 476,000 and last year’s 483,631. The estimated total for the week (so far) is 1,928,000, which is below last week’s 1,933,000 and last year’s 1,935,361.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, October 15, 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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
tested support at the
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.