October Lean Hogs opened higher and made the high just a tick above the open at 84.125. Bearish traders came in and slapped price lower and it continued lower the rest of the session as Tuesday’s bearish Shooting Star candlestick emboldened traders. The selling pressure took price down to support at the 81.70 key level, making the low just below it at 81.575. It settled near the low, but above support at 81.875. The Wednesday breakdown ate up just about half of the breakout candle rally from August 30th. This area needs to hold in my opinion, or we could see another flush downward and put the fledging short-term up trend in jeopardy. Weights increased week over week and maybe traders believe the decline was a one off for hogs. This week’s weight measurement, however, was still well beIow last year’s and the 5-year average for this time period. Cutouts stalled after Tuesday’s jump and traders probably would like to see cutouts show strength instead of up and down action. A failure from the low, could lead to a re-test of the 80.45 support level. Support then comes in at 79.80. If settlement holds, we could see price attempt to recoup the Wednesday’s drop and test resistance at 83.325.
The Pork Cutout Index increased and is at 93.96 as of 9/05/2023.
The Lean Hog Index decreased and is at 86.56 as of 9/04/2023.
Estimated Slaughter for Wednesday is 480,000, which is above last week’s 473,000 and below last year’s 487,000. Tuesday’s slaughter was revised lower to 470,000. The estimated slaughter for the week (so far) is 952,000, which is below last week’s 1,425,000 and last year’s 976,000.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays (except holiday weeks) and our next webinar will be on Thursday, September 07, 2023, 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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