Commentary
June Lean Hogs had a strong opening 5 minutes of trade. It opened higher and raced to the session high at 91.05 in the first 5-minutes of the day. That’s it…. rally over. It consolidated and then started its way down and kept going to the low at 87.875 at the end of the day. It settled near the low at 88.00, putting Hogs back below support at 88.325. There is a multitude of support just below the low, with the major level at the 200-DMA at 87.675. A failure from here could see a test of support at 87.10 and then the 100-DMA now at 86.325. If we can regain the 88.325 key level, Hogs may revisit resistance at 90.40. The strong open was a result, in my opinion of the stronger one-day cutout close on Tuesday. The major break down started after a negative cutout in the morning. It didn’t get any better in the afternoon, which could put more pressure on hogs on Thursday morning. It just shows the inconsistency in the cash markets as price recovers and falters. The anticipation remains that pork cash prices are going to rise going forward, but futures are at a strong premium to the Lean Hog Index and anticipation only goes so far. Especially when there is so much turmoil in the outside markets. Cash hogs ended the day mixed so that won’t help. We have exports out before the open on Thursday morning.
The Pork Cutout Index increased and is at 80.20 as of 05/02/2023.
The Lean Hog Index increased and is at 73.02 as of 05/01/2023.
Estimated Slaughter for Wednesday is 467,000, which is below last week’s 477,000 and last year’s 479,000. Tuesday’s slaughter was revised higher to 470,000. The estimated slaughter for the week (so far) is 1,386,000, which is below last week’s 1,416,000 and last year’s 1,486,000.
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.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
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