Commentary
April Lean Hogs continued to frustrate bulls, opening higher and then reversing course and making a new low for the down move at 83.20. This is just below support at 83.325 and this time bulls weren’t denied, taking price back above the key level and rallying the rest of the session to the high at 84.875. This took price back to the confluence of resistance levels from the declining 8-DMA now at 84.675, the 50-DMA now at 84.90, the 13-DMA now at 85.40 and resistance at 85.325 and the 100-DMA now at 85.475. Settlement was at 84.80 which puts futures in the lower end of the band. Cutouts and the Lean Hog Index keeps creeping higher which continues to give hope to bulls that we will see a breakout in cash prices sooner rather than later. If cash can start to advance more aggressively, futures can breakout to the upside, in my opinion. I think the downside is limited by the index and it is moving higher. Sounds like I am trying to convince myself, doesn’t it…. A failure from settlement, could see price revisit support. 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 price can rally past this confluence of resistance, we could re-visit resistance at 87.10.
The Pork Cutout Index increased and is at 86.67 as of 03/06/2023.
The Lean Hog Index increased and is at 78.91 as of 03/03/2023.
Estimated Slaughter for Tuesday is 485,000, which even with last week and above last year’s 480,000. Monday slaughter was revised lower to 461,000. The estimated total for the week (so far) is 946,000, which is below last week’s 967,000 and even with 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, 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
Fax: 312.256.0109
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
tested support at the
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.