February Lean Hogs in a quiet holiday inspired trade, opened higher and traded up to the high of the day at 71.25. It reversed and broke down to the low of the day at 70.125. It then made a run towards the high and settled in the middle of the range at 70.65. Price is consolidating in the middle of its 65.40 – 74.90 range on the continuous chart as the holiday action and the nervously awaited Quarterly Hogs and Pigs report limited traders desire to move the market. Volume was light and the report comes out after the close on Friday. This report in my opinion, could set the tone for the market as we end the 2023 trading year and go into 2024. Price traded to just below resistance at 71.325 and just below support at the 38.2% retracement level at 70.475 of the 78.70 high from September 20th to the 65.40 low on October 20th on the continuous chart. The cash market continues to suffer as the indices remain weak as slaughter levels remain high keeping supplies plentiful and pricing power weak, in my opinion. Futures could continue its sloppy trade on Friday as the light volume and pending report could prevent traders from attempting any market moving price action. If price can hold settlement, we could retest resistance 71.325. Resistance then comes in at 71.85 and the nearby 50% retracement at 72.05. If futures clear the 50% retracement level, we could see a re-test of resistance at 72.80. Resistance then comes in at the 61.8% retracement level at 73.625. If futures fail to hold settlement, we could see a breakdown to re-test support at the flattening 50-DMA now at 69.975 and the nearby 69.90 support level. Cattle markets have its own important report out on Friday. It is the Cattle on Feed Report.
The Pork Cutout Index decreased and is at 83.20 as of 12/20/2023.
The Lean Hog Index increased and is at 66.54 as of 12/19/2023.
Estimated Slaughter for Thursday is 490,000, which is above last week’s 489,000 and last year’s 254,000. Wednesday slaughter was revised lower to 478,000. The estimated total for the week (so far) is 1,936,000, which is above last week’s 1,914,000 and last year’s 1,676,000.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be on Tuesday, December 27, 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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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