Hogs Surge

Ben DiCostanzoGeneral Commentary

October Lean Hogs opened higher, dipped to the low at 82.975 and rallied the rest of the session to the high at 85.35. It settled near the high at 85.275. The low was just above support at the rising 8-DMA, now at 82.95. The high was just above resistance at 85.325 and settlement was just below it. Long-term moving average resistance is right there at 85.30. There is strong long-term resistance just above here at the 100-DMA (86.075) and the 200-DMA (86.15). Tough hurdles for sure and then there’s resistance just above that at 87.10.  The pork cutout index is starting to firm once again and the Lean Hog Index has stabilized. Consumer demand could be improving as grocers feature pork again and our exports have been strong. Weights have been lower than last year, which could indicate tightening supplies of market ready hogs. If cutouts can continue to firm, we could see packers get more aggressive and bid up price to acquire hogs. This is an interesting time of year for the pork industry as you can get good rallies in the cash market into October but you also can see continued price pressure into October. Right now, traders seem to be on a rally into October seasonality feature. A rally past the Tuesday high could see price test the aforementioned reisitance. A failure from settlement could see price revisit support at 83.325.

The Pork Cutout Index increased and is at 97.60 as of 9/11/2023.

The Lean Hog Index dipped and is at 86.17 as of 9/08/2023.

Estimated Slaughter for Tuesday is 477,000, which is above last week’s 470,000 and below last year’s 480,000. Monday’s slaughter was revised lower to 468,000. The estimated slaughter for the week (so far) is 945,000, which is above last week’s 472,000 and below last year’s 960,000.

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, September 14, 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.

Direct: 312.957.4163


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