Commentary
February Lean Hogs opened higher, made the session high at 84.175 and broke down to the session low at 82.80, all in the first fifteen minutes of trade. That’s it! It consolidated within the opening 15 minutes the rest of the session and settled lower on the day at 83.70. Ho hum…. A confused market as slaughter and production continues below last year yet there isn’t any pricing power in cash hogs nor the cutout market, in my opinion. Exports are running lower than last year and a lower dollar hasn’t helped. Granted, we are in the last phase for 2022, but we couldn’t get any sold for next year. Chines prices have been on the decline as weak demand and excess slaughter has put pressure on their markets. The lockdowns have put a crimp in pork demand in my opinion and the recent talk of a re-opening of the economy and no more lockdowns as they are now claiming all is good with covid as the new cases are no worse than the flu could lead to a surge in demand as they head into the January holidays. This may lead to an increase in imports, which, hopefully lead to bigger export sales numbers for the US. We’ll see…. The low came in below support at 83.325 and settlement was above it. A Hammer candlestick formed and maybe Monday was hammering a low …. A rally above the session high could see price test resistance at the 50-DMA, now at 85.00. Resistance then comes in nearby at 85.325and then the declining 13-DMA now at 86.825. Continued pressure on price could take Hogs below support at 83.325 once again and then work their way lower to test support at 81.70.
The Pork Cutout Index decreased and is at 86.81 as of 12/09/2022.
The Lean Hog Index decreased and is at 81.99 as of 12/08/2022.
Estimated Slaughter for Monday is 490,000 which is above last week’s 483,000 and last year’s 485,000. Friday’s slaughter was revised lower to 475,000. Saturday slaughter was revised higher to 147,000. Slaughter for last week was revised lower to 2,570,000.
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 15, 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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