Commentary
April Lean Hogs traded both sides of unchanged on Wednesday making the high at 85.85 and the low at 84.50 and it settled at 85.325. The low was just above the declining 21-DMA now at 84.15 and the high was once again just above the confluence of key levels and its recent consolidation highs. Settlement was right in between these levels as the key level at 85.325 was at settlement and the 100-DMA at 85.225 was below it and the 50-DMA at 85.625 is above settlement. The session traded within Tuesday’s range forming an inside candlestick. The market, in my opinion is coiling and a move away from this area will lead to its next directional play. The cash market is stagnant as cutouts are showing no signs of being able to rally as slaughter levels are higher than trade has expected, but weights are down from last week and last year. Where are the hogs coming from is the question I hear from producers. The LHI (see below) made a new low, but the cash price may be starting to turn as prices have moved higher the past two days. We’ll see…. If Hogs hold settlement, we could test resistance at the Friday high at 86.55. Resistance then comes in at 87.10. A failure from settlement could see price re-test support at the 21-DMA. Support then comes in at 83.325. Exports are out before the open on Thursday morning.
The Pork Cutout Index increased and is at 79.60 as of 01/24/2023.
The Lean Hog Index down ticked and is at 72.11 as of 01/23/2023.
Estimated Slaughter for Wednesday is 490,000 which is above last week’s 481,000 and last year’s 476,000. The estimated total for the week (so far) is 1,463,000, which is above last week’s 1,392,000 and last year’s 1,399,000.
Cold Storage
Total red meat supplies in freezers were up 2 percent from the previous month and up 11 percent from last year. Total pounds of beef in freezers were up 4 percent from the previous month and up 7 percent from last year. Frozen pork supplies were up 1 percent from the previous month and up 16 percent from last year. Stocks of pork bellies were up 16 percent from last month and up 66 percent from last year.
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, January 26, 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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