February Lean Hogs opened lower and rallied to the high of the day at 70.475. The high was right at resistance of the 38.2% retracement of the September 28th high at 78.70 and the October 20th low at 65.40. It broke down from here and traded to the low at 68.025. It settled near the low at 68.45. The low approached support at 67.80 and settlement was below the key level at 68.75. It formed an outside day down candlestick, keeping bears in control of the price action, in my opinion. The cash market remains weak and the cash weakness and the bearish Hogs and Pigs report has bulls on the run. Cutouts and cash prices continue to grind lower as strong exports and decent US demand hasn’t been able to overcome the high slaughter and heavy pig weights and the resulting strong production. Friday is the week end, month end and year end. Will traders continue to pressure Hogs or will we see some profit taking? If settlement fails, we could test support at 67.80 and then 66.55. The December 13th low at 66.225 is next and then 65.80. If price reclaim resistance at 68.75, we could test resistance at 69.90 and the nearby 50-DMA now at 70.05. Resistance then comes in at the 38% retracement at 70.475.
The Pork Cutout Index decreased and is at 81.97 as of 12/28/2023.
The Lean Hog Index increased and is at 65.71 as of 12/26/2023.
Estimated Slaughter for Thursday is 490,000, which is above last week’s 485,000 and last year’s 480,000. The estimated total for the week (so far) is 1,429,000, which is below last week’s 1,931,000 and last year’s 1,463,000.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be on Tuesday, January 02, 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
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