October Lean Hogs consolidated within Monday’s trading range, forming an inside candlestick. It opened higher and rallied to the high of the day at 85.825. It failed and traded down to the low at 83.85. It bounced and settled at 84.575. Hogs are struggling after failing at resistance at the 200-DMA on August 1st. Today’s rally took price back above resistance at 85.325 and it could not hold it and settled below it. It tested support at the 13-DMA at 84.175 and settled above it. Futures are still cheap to cash in my opinion and could limit declines. We are entering the seasonal increase in Hog supply and with beef prices expensive, retailers could continue to feature pork as we near the Labor Day Holiday. This could also help support Hogs if pork demand can hold. Some analysts are questioning whether or not we will have a sizeable increase in supply with the recent shortfall in slaughter. If low numbers continue, it could mean supply may not be as large as originally expected. We’ll see…. If Hogs can rally past the Tuesday high, it could retest resistance at the 200-DMA now at 86.80. Resistance is nearby at 87.10. A failure at settlement could see a test of the Tuesday low. Support then comes in at 83.325.
The Pork Cutout Index decreased and is at 114.32 as of 8/07/2023.
The Lean Hog Index declined and is at 105.04 as of 8/04/2023.
Estimated Slaughter for Tuesday is 471,000, which is below last week’s 476,000 and last year’s 474,000. The estimated total for the week (so far) is 882,000, which is below last week’s 952,000 and last year’s 933,000.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays (except holiday weeks) and our next webinar will be on Thursday, August 10, 2023, 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
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