Commentary
April Lean Hogs opened below our resistance levels, making the session low at 84.225 early in the trading session. With price unable to go lower, bulls took over and quickly took Hogs to the session high at 86.175. That’s it… trade was over by 9:30 AM CST, as price consolidated the rest of the session and settled at 85.75. This took price above the confluence of resistance levels from the declining 8-DMA now at 84.625, the 50-DMA now at 84.85, the 13-DMA now at 85.375 and resistance at 85.325 and the 100-DMA now at 85.525, with the high and higher settlement. The bullishness is a weak one, in my opinion as the high and settlement are so close to these key levels that any weakness on Thursday could send price back down to lower support levels. That’s right lower support levels, because with the higher settlement these levels can be considered support. 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. Anticipation is starting to build, in my opinion, that the cash markets are going to go higher and at increasing rates as we head to the grilling season. Exports are out before the open and could play a role in the Thursday price action. 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 hold settlement, we could re-visit resistance at 87.10. Resistance then comes in at 88.325.
The Pork Cutout Index increased and is at 86.28 as of 03/07/2023.
The Lean Hog Index increased and is at 79.09 as of 03/06/2023.
Estimated Slaughter for Wednesday is 481,000, which is above last week’s 468,000 and last year’s 478,000. The estimated total for the week (so far) is 1,427,000, which is below last week’s 1,435,000 and above last year’s 1,424,000.
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, 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.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
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