Hogs Rally in Front of Holiday

Ben DiCostanzoGeneral Commentary

August Lean Hogs broke out of its trading range, racing to a new high at 95.325. The high was just past resistance at 95.30 and price pulled back to settle at 94.325. The low was at 92.15. The cash market continues to show strength and both cash and cutouts were surprisingly strong on Monday. Prop 12 is now in effect for the State of California, and no one in my opinion knows what the **** is going to happen. What is the compliance? How many producers and processors have become certified? What will happen to those not in compliance who dare to sell product in California? Were the past few weeks of strength in the cash markets vendors procuring product before the deadline so they could stay in business? Is California law, the law of the land? How many other states will come up with radical laws to stifle food production? Why are they doing this? Are activists in control? If the Feds don’t come up with a national solution quickly all #### could break loose, in my opinion! It was an unfortunate and surprising decision by the court to uphold the California law. I didn’t think it would survive… but survive it did… Now are producers, processors, vendors (grocery / food service) and consumers going to pay the price for activist lunacy?? Probably…. We could have a two-tiered market where product is dumped on the normal states and not enough product goes to the other ones (other states have come up with production laws of their own) … We’ll see!!!!!A rally above 95.30 could see price move towards resistance at 97.30. A failure from settlement could see price test support at 93.50. Support then comes in at 92.375. In my opinion, producers should be thinking about protection, because the uncertainty is huge and a collapse could take place. Then again nothing could change…. Like I said, in my opinion …. no one knows….

The Pork Cutout Index increased and is at 100.88 as of 6/30/2023.

The Lean Hog Index increased and is at 93.92 as of 6/29/2023.

Estimated Slaughter for Monday is 394,000, which is below last week’s 440,000 and above last year’s 2,000.

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, July 06, 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.

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

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