April Lean Hogs gap opened higher, closed the gap while making the session low at 84.65 and rallied to the session high at 85.775. It drifted lower the rest of the session and settled near the low at 85.00. The dip lower barely took out the Wednesday high at 84.725 and the rally tested resistance at 85.325. It failed to hold resistance and the rally couldn’t challenge the January 30 high at 85.925. It formed a Doji candlestick, indicating indecision in the market. The cash market has bounced back after its recent dip and as we near the Easter Holiday, it is expected that grocery stores will be featuring hams to drive business. Last year, they didn’t feature hams during the Easter season, keeping prices elevated. This could keep domestic demand strong to go with an exploding export report. The report showed net sales of 71,900 MT for 2024 were up 83 percent from the previous week and up noticeably from the prior 4-week average. Mexico at 25,000 MT, China at 19,500 MT, Japan at 9,100 MT, South Korea at 6,000 MT and the Philippines at 4,300 MT led the way. Most analysts weren’t expecting China to be buying much pork from us do to strong production of their own. Something is up over there as they have been buying pork in a pretty good way so far this year. Hogs are entering a seasonal decline in slaughter that was delayed due to the weather-related slowdown earlier in January. If this comes to pass, we could continue to see cutouts and cash move higher, and the futures are reflecting this with the large premium to the index. If futures can retake resistance at 85.325, it could revisit the Thursday high and then the Jan 30th high. Resistance then comes in at 87.10. A failure below the Thursday low could see price test support at 83.325. Support then comes in at the rising 13-DMA now at 82.70.
The Pork Cutout Index increased and is at 86.72 as of 02/14/2024.
The Lean Hog Index increased and is at 74.60 as of 02/13/2024.
Estimated Slaughter for Thursday is 489,000, which is below last week’s 491,000 and above last year’s 472,257. The estimated total for the week (so far) is 1,955,000, which is below last week’s 1,957,000 and above last year’s 1,913,527.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, February 13, 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
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tested support at the
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