August Lean Hogs is now the lead contract as its volume has surpassed the volume of the June contract. It opened lower and made the high at 91.15. It broke down the rest of the session and made the low at 88.75. Settlement was near the low at 89.125. The breakdown took price through support at 90.40 with it stalling just above the 88.325 support level. This is a new low for the down move on the continuous chart keeping the pressure on bulls. The cutout market is finding it tough to gather steam to the upside, giving you a one-day rally then successive down days, which is keeping a lid on cash prices. Slaughter numbers have been stronger than expected which implies, in my opinion that hog numbers are larger than analysts have predicted. Stories are out that retailers have been keeping pork prices higher, just like last year that has cut back consumer demand and with record high production in the month of May has kept the markets from rallying despite excellent exports. (The USDA just put out the Livestock slaughter report and said that production of pork for the month of May was a record.) A failure from settlement could send price down to test support at 88.325. Support then comes in at 87.10. If price can hold settlement, it could test resistance at 90.40. Resistance then comes in at the 92.375.
The Pork Cutout Index decreased and is at 98.69 as of 06/19/2024.
The Lean Hog Index ticked higher and is at 90.72 as of 06/18/2024.
Estimated Slaughter for Thursday is 480,000, which is above last week’s 470,000 and last year’s 460,967. The estimated total for the week (so far) is 1,904,000, which is above last week’s 1,885,000 and last year’s 1,836,790.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, June 25, 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
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