October Lean Hogs gap opened lower and made the session low at 74.925. The low was below support at 75.60 and looked like it was going to break down to support at 74.25. It was threatening the lows from this recent consolidation with the August 16th low at 74.675 the value needed to get taken out. But bearish traders couldn’t get it done and bulls came roaring back and took price higher almost going up limit as it made its high at 79.775, just below resistance at 79.80 and the limit would have been made at 79.90. It settled near the high at 79.625. The opening weakness was all about a lower one-day cutout on Wednesday and a disappointing export sales report released before the open. Traders overcame the negative fundamentals, as the cutout and cash index have been on the decline recently. Slaughter numbers have been increasing and the extra supply has been keeping cash from surging in my opinion. Even though the export sales number was low for the second week in a row, (two successive marketing year lows), it was still higher than the 5-year average both weeks. So, this time period is a weak time for exports, which makes the enthusiasm for hogs on the breakdown this morning even more surprising. That is a good thing for producers as it could help pricing if futures continue to go higher. If price breaks down from settlement, we could pullback and test support at 78.80. Support then comes in at 77.80, 76.175, 75.60 and then 74.25. If price could break past resistance at 79.80, we could test resistance at 80.45. Resistance then comes in at 81.70.
The Pork Cutout Index decreased and is at 97.53 as of 08/21/2024.
The Lean Hog Index decreased and is at 89.21 as of 08/20/2024.
Estimated Slaughter for Thursday is 482,000, which is above last week’s 479,000 and last year’s 465,041. The estimated total for the week (so far) is 1,928,000, which is above last week’s 1,925,000 and last year’s 1,874,185.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, August 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
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