April Lean Hogs broke out of its recent consolidation band on Friday, trading up to 87.525 and then pulling back to settle at 86.925. It made the low early in the session at 84.95. The rally took price just past resistance at 87.10 which held as settlement was below it. This gives bearish traders some hope and forces bulls to have to work hard next week to force some short-covering out of bearish traders. Price does have some hurdles to jump over as the rally put futures back into the 85.325–87.10 support -resistance band it was in at the end of February. The cash market continues to improve with the indices moving higher, giving bulls some energy to press their agenda. Cutouts and the cash hogs both ended the week trading higher, which should give the indices a positive start to next week. Bears are hopeful as exports slowed with Thursday’s report so we should be watching this to see if this is a one off or the start of a negative with cutout prices strengthening. We need strong exports to keep supply moving. Spring is coming which usually leads to less supply and the grilling buy season is also nearing. With beef cutouts moving higher, pork has a chance to gain favor as even with its recent strength, it is still well below beef cutouts. Hopefully, Easter ham buying was strong to give grocers’ further reason to push pork. We’ll see!… If Hogs can take out resistance at 87.10, it could move towards resistance at 88.325. Resistance then comes in at 90.40. A failure from settlement could see price test support at 85.325. A failure from hear will put Hogs back in the lower end of its trading range.
The Pork Cutout Index increased and is at 92.58 as of 03/14/2024.
The Lean Hog Index increased and is at 82.19 as of 03/13/2024.
Estimated Slaughter for Friday is 444,000, which is above last week’s 442,000 and below last year’s 465,521. Saturday’s slaughter is estimated to be 137,000, which is above last week’s 105,000 and last year’s 95,526. The estimated slaughter for the week (so far) is 2,479,000, which is above last week’s 2,456,000 and below last year’s 2,491,920.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, March 19, 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.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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