Commentary
June Lean Hogs took one to the chin and went down for the count as prices broke down erasing Friday’s gains. Price was lower at the open, making the high at 91.425 and then racing to the low at 88.95. It consolidated the rest of the session and settled at 89.70. Friday’s rally extended the futures premium to the Lean Hog index in hope that we would see some jumps in the cash market. It hasn’t happened yet, though hope remains eternal, and futures paid the price for the inability of cash to fly high. Futures are still trading large to the index, so buyers beware. We need to see both the cutouts and cash market thrive and we are not seeing it. Our pork is probably the cheapest out there (world) and our exports are showing that as our product is gaining traction in the world marketplace. If it continues to grow that would help prices inch higher but we need consumer demand here in the states to get prices over the hump. Our exports have been excellent in my opinion so it must be domestic demand that is keeping a lid on price. Reports are that grocers haven’t been lowering pork prices as the cash market sags and consumers are ignoring pork and buying the more expensive beef products so far. Beef cutout prices are at 310.02 while pork cutouts are faltering and are at 80.47. That is almost 4x the price of pork. Ouch!!! If Hogs fail to hold settlement, we could see at test of support at 88.325. Support then comes in at the declining 200-DMA now at 87.70. If Hogs can hold settlement, we could test resistance at 90.40. Resistance then comes in at the Monday high.
The Pork Cutout Index ticked higher and is at 78.93 as of 04/28/2023.
The Lean Hog Index increased and is at 71.49as of 04/26/2023.
Estimated Slaughter for Monday is 459,000, which is below last week’s 469,000 and last year’s 476,000.
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, May 04, 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.