April Lean Hogs opened lower and then raced higher making a new high for the up move at 88.90. This took price above resistance at 88.325and it held as price pulled back hard, testing the key level at 87.10 and then climbing back above it to settle at 87.20. The low came in at the opening range at 85.875. The cash market has continued its ascent with both indices making highs for the new year even as production has remained elevated. This indicates strong demand and we are seeing that with strong exports to start the year and domestic demand is improving as retailers have kept pork prices at favorable levels to the beef market. In other words, priced to move product. This keeps consumers coming to the market and helps move other products, in my opinion. The USDA stated they will put forth a correction to last weeks exports. We will see what that does to the numbers but the expectation is that exports will be strong once again. This is with the Dollar rallying the last couple weeks. Puts a crimp in the Dollar high exports low ritual statement. When customers need product, they will buy. If prices are high for short periods, they will bite the bullet and close their eyes and buy, buy, buy. So at present, customers need product…. We also have an early Easter Holiday so it is expected to be a heavily features ham market for the holiday. Plus, spring is coming and demand could continue to grow for pork. But be wary because if beef doesn’t surge into spring, consumers may look for a different taste as we near the grilling season. We’ll see…. If futures can hold settlement, it could revisit resistance at 88.325 and then the Thursday high. Resistance then comes in at 90.40. A failure below 87.10 could see price test support at 85.325. Support then comes in at the rising 8-DMA now at 84.475.
The Pork Cutout Index increased and is at 91.33 as of 02/21/2024.
The Lean Hog Index increased and is at 77.97 as of 02/20/2024.
Estimated Slaughter for Thursday is 490,000, which is above last week’s 489,000 and last year’s 361,399. The estimated total for the week (so far) is 1,960,000, which is above last week’s 1,955,000 and last year’s 1,723,837.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, February 27, 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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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