June Lean Hogs was hammered on Friday, opening lower, making the high at 106.025 and then crashing to go limit down at the low at 102.05. It sat there the rest of the session, with a slight uptick at the end of the day, keeping it from settling limit down. Settlement was at 102.075. The Equity markets were banged up on Friday, the spectre of war spreading in the Middle East, the US Dollar rising and the April contract expiring all played a big role in the crash of hogs, in my opinion. This could put pressure on export demand and also impact consumer willingness to spend money on pork. With June already the lead contract, traders had built a strong premium of the contract to the cash index. It is now the lead and spot contract and with the expiration Friday of the April contact, traders took some of the premium off the table as the rubber band stretched maybe a little too far and now as the spot contract, maybe it was a little ahead of itself and some pulling back was necessary. Technically, with the new high and reversal on Wednesday forming a bearish engulfing candle also put pressure on hogs. The limit down move left hogs just above support at 101.975 and the rising 21-DMA now at 101.75. These levels will key the trade next week, in my opinion. If price can hold these levels, we could consolidate and move towards resistance at 104.35. A failure from support could see price test support at 100.075.
The Pork Cutout Index increased and is at 100.08 as of 04/11/2024.
The Lean Hog Index increased and is at 89.84 as of 04/10/2024.
Estimated Slaughter for Friday is 484,000, which is below last week’s 485,000 and above last year’s 467,981. Saturday slaughter is expected to be 89,000, which is below last week’s 107,000 and last year’s 169,039. The estimated total for the week is 2,485,000, which is above last week’s 2,421,000 and last year’s 2,427,078.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, April 16, 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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