Commentary
April Lean Hogs opened weak and plummeted, trading down to the session low at 82.35 by mid-morning. It consolidated near the low for the rest of the session and settled at 82.725. The high was at 86.30. With futures trading at a stiff premium to the cash index, it didn’t take much to snap that rubber band. Only a Chinese “weather balloon” that made its way across the US airspace that was finally shot down over the Atlantic ocean. The increase in tensions as the Chinese cried its only a weather balloon and many in the US screamed it’s a surveillance observatory, led many to panic believe pork trade will “cease” between the two countries, (in my opinion). With slaughter and production running high, traders’ sense this would not be a good thing, hence cries of sold… sold … sold… could be heard across the imaginary trading pits. The selloff took price to a new low for the April contract as the lead contract and puts futures in a precarious position, in my opinion. If Hogs hold settlement, we could test resistance at 83.325. Resistance then comes in at the declining 100-DMA now at 84.725. A failure from settlement could see price test support at 81.70. Support then comes in at 80.45.
The Pork Cutout Index down ticked and is at 80.03 as of 02/03/2023.
The Lean Hog Index increased and is at 73.05 as of 02/02/2023.
Estimated Slaughter for Monday is 487,000, which is above last week’s 475,000 and last year’s 479,000. Saturday’s slaughter was revised higher to 173,000, which raises the estimated total for the week 2,595,000.
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, February 9, 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.
**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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