August Lean Hogs burst out of the starting gate Monday morning, racing to the high of the day at 96.95 and closing the gap created from the July 7th high at 96.675 to the July 6th low at 96.775. Traders reevaluated the market and Hogs fell apart, trading down the rest of the session to the low at 93.875. It settled at 94.175. The rally and then ensuing decline took price above and below Friday’s trading range, forming an outside candlestick. With a lower close, the candlestick indicates potential weakness in Hogs. The close below the rising 8-DMA at 94.25 is also negative for Hogs and continued pressure could take price down to test support at 93.50 and then the rising 13-DMA now at 92.95. Support then comes in at 92.375. The cash markets have been strong but futures are feeling the pain, anticipating cash will not be able to hold onto its gains as we get deeper into the dog days of summer. Don’t forget, futures surged just 2-trading days ago to a new high at 100.75 which was soundly rejected. This rejection and subsequent decline, keeps the pressure on bulls and has placed bears back in control of the price action. Bulls must retake resistance at 95.30 and then settle above the Monday high to have a chance to challenge the recent high. They hope that with the index above futures and the July contract just days away from its expiration that the downside is limited and the ship will right itself. We’ll see!!
The Pork Cutout Index increased and is at 106.30 as of 7/07/2023.
The Lean Hog Index increased and is at 97.43 as of 7/06/2023.
Estimated Slaughter for Monday is 468,000, which is above last week’s 394,000 and last year’s 439,000.
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 13, 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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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