Commentary
February Lean Hogs gap opened lower, breaching the 50-DMA (83.85) at 83.725 then whirled around and surged to an early high at 85.90 by mid-morning. The open turned out to be the session low and the rally stalled, testing the middle of the range and grinding higher to the session high at 85.95. It pulled back and settled at 85.35. The lower open and subsequent rally created a “potentially” Bullish Engulfing candle formation. The rally took price past resistance at 85.325 (settlement above it), but it stopped just short of the 21-DMA now at 86.275. The market saw some short-covering after digesting the Chinese protest news the past two days. Cash market is still showing weakness in the indices, but cutouts showed some positivity in the morning cutout report. Traders may be looking for a seasonal bounce in the cash markets and Exports are out before the open on Thursday and with the Dollar on the decline, it will be interesting to see what transpired during the holiday week. If price can’t hold above settlement, we could re-visit support at the 50-DMA. Support then comes in at 83.325. If Hogs can overtake the 21-DMA, we could test resistance at 87.10. Resistance then comes in at 88.325.
The Pork Cutout Index decreased and is at 88.67 as of 11/29/2022.
The Lean Hog Index decreased and is at 84.21 as of 11/28/2022.
Estimated Slaughter for Wednesday is 494,000 which is above last week’s 448,000 and last year’s 479,000. Tuesday’s slaughter was revised lower to 487,000. The estimated total for the week is 1,474,000, which is above last week’s 1,428,000 and last year’s 1,441,000.
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, December 01, 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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