October Lean Hogs opened lower and made the low of the day at 75.65. This was just above support at 75.60 and this propelled price higher to an early high at 77.125. The market broke down from the early high and tested the low, stopping just above the low at 75.975 and then bouncing back and rallying the rest of the session to the high of the day at 77.325. Settlement was near the high at 77.025. The Hog rally was impressive as the cattle markets cratered and outside markets also were taking a dive creating negative sentiment all around except for the Hogs. Traders were likely looking at our continued excellent exports and a resulting cutout market that was in positive territory in the morning report. The afternoon cutout was down 0.78 to 105.17 so traders may pause their excitement in the morning if outside markets continue lower. Cutouts, however, are not the only positive for Hogs as the cash market and resulting Lean Hog Index has made new a high and looks like it will be higher again on Friday. This rally has occurred while production has been elevated and at a time when this strong production usually pressures prices. So, traders are impressed, resulting in a positive market, in my opinion. This is occurring when cattle cash markets are stable at its record high prices and futures traders are not believing cash prices can stay at their record levels and have been selling in the futures market and putting some pushback in the cash market. The rally in Hogs, however, still hasn’t taken out Monday’s large breakdown candle so the bears are in my opinion still in control of the market. If price can hold settlement, it could test resistance at 77.80 and then move towards resistance at 78.80. A failure from settlement could see price test support at 76.175 and then 75.60.
The Pork Cutout Index ticked higher and is at 105.67 as of 07/31/2024.
The Lean Hog Index increased and is at 93.08 as of 07/30/2024.
Estimated Slaughter for Thursday is 481,000, which is above last week’s 475,000 and last year’s 465,582. The estimated total for the week(so far) is 1,916,000, which is above last week’s 1,888,000 and last year’s 1,895,700.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, August 06, 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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