For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, February 25, 2025, at 3:15 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.
April Lean Hogs gap opened lower, made an early low then rallied to the session high at 90.375. The rally closed the gap but stalled just under resistance at the key level at 90.40 and the flattening 21-DMA now at 90.625. It broke down to the session low at 88.40, stopping just above support at 88.325 and then drifted near the low the rest of the session to settle at 88.525. The breakdown has come about as the pork cutout has fallen from its recent peak at 102.47 by over 8 bucks as the belly has collapsed from its recent high. This could be causing traders to believe the cash market is going to turn lower after reaching new highs. With Easter looming and slaughter levels declining, the unexpected breakdown in the cutout has been psychologically damaging the futures market. With beef cutouts in freefall, the strength in the pork cutout was giving traders a reason to believe that retailers were going to aggressively market pork during the Easter seasonal, with its much cheaper prices. That belief could be going out the window with the crash in the belly. I think with the continuing decline in slaughter numbers, Hogs will likely maintain its upward pressure as the lower slaughter implies (in my opinion) a tighter supply of pigs, which could keep the packer aggressive in their pursuit of pork. The breakdown in the belly could just be a reset of price and with the volatile nature of the belly we could see it come right back as the industry tries to buy on the pullback and turns it higher yet again. Exports were low in last week’s report so we must hope we see it bounce back going forward as exports are important to the demand equation for the industry. Continued weakness in exports could sour the market. This week’s report will be released before the open on Friday. With futures just above support it will help sentiment if exports come out strong. If they continue to display a weak number, we could have some issues with regards to the price action. We’ll see!… A breakdown from settlement could see price test support at 87.10. The rising 50-DMA is nearby at 86.425. If price can hold settlement, We could move towards the Thursday high.
The Pork Cutout Index decreased and is 100.09 as of 02/19/2025.
The Lean Hog Index increased and is at 90.98 as of 02/18/2025.
Estimated Slaughter for Thursday is 473,000, which is below last week’s 487,000 and last year’s 489,788. The estimated total for the week (so far) is 1,930,000, which is below last week’s 1,959,000 and last year’s 1,955,954.
**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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