Commentary
April Lean Hogs continued its disappointing performance, opening lower and rallying to the high at 84.975 then trading down the rest of the session to 83.30. It settled near the low at 83.475. This is a new low for the down move as the opening rally was handcuffed and by the confluence of resistance levels from the declining 8-DMA now at 84.825, the 50-DMA now at 84.975 to the 13-DMA now at 85.50. With resistance at 85.325 and the 100-DMA now at 85.425 rounding out the levels confronting Hogs. The low ticked below support at 83.325 but, settled above it. The cash market continues to tip-toe through the tulips, not able to gain any ground. With futures at a strong premium to cash, traders losing confidence that cash can rally like the cattle cash markets. Cattle cash prices are trading well above pork cask prices and what is keeping some hope alive is that very fact, in my opinion. There is hope Hogs will start to close the difference as consumers “hopefully” flock to the cheaper pork prices as the trade downward has been slow but steady. If Hogs take out support at 83.325, we could see futures test support at 81.70 and then the February 7th low at 81.275. If settlement holds, we could re-visit resistance the above lovels.
The Pork Cutout Index ticked higher and is at 86.40 as of 03/03/2023.
The Lean Hog Index ticked higher and is at 78.71 as of 03/02/2023.
Estimated Slaughter for Monday is 469,000, which is below last week’s 482,000 and last year’s 466,000. Friday slaughter was revised lower to 467,000, which lowers the weekly total to 2,512,0000.
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, March 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
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