Walsh Trading Daily Insights
Commentary
December Lean Hogs continued its lack luster trading. It was however, able to trade above Monday’s high, making the Tuesday high at 86.575 and a higher low at 84.60. It also settled higher at 85.325. This is right at the key level of the same price. The low tested support at the declining 50DMA now at 84.475 and the high tested resistance at the flattening 21-DMA at 85.875. The February contract was more positive and it should become the lead contract in a week or two. The cash market continues to struggle even as slaughter levels remain below last year. Pork production continues to sag as weights are down alongside the lower slaughter. Traders continue to anticipate higher slaughter and it remains elusive. Why? Are the numbers just not there? China’s numbers are believed to be lower than official data reflects. They have been in our market on a consistent basis. They wouldn’t be here if they were able to sustain themselves. Their producers have suffered losses. It is expected to increase imports in the 4th quarter. They will import more in 2023, in my opinion. They are in trouble. All the lock downs have trapped the people and when they relax the restrictions, the people will go hog wild, in my opinion. Production around the big world exporters are lower, interesting times lie ahead in my opinion. We’ll see. A breakdown below the 50-DMA could see price test support at 83.325. Support the comes in at 81.70. If price can overtake the 21-DMA, we could see price test resistance at 87.10. Resistance then comes in at 88.325.
The Pork Cutout Index down ticked and is at 95.87 as of 11/14/2022.
The Lean Hog Index ticked higher and is at 88.65 as of 11/11/2022.
Estimated Slaughter for Tuesday is 490,000 which is below last week’s 491,000 and above last year’s 483,000. Monday slaughter was revised lower to 485,000. The estimated total for the week (so far) is 975,000, which is below last week’s 985,000 and above last year’s 966,000.
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, November 17, 2022 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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