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April Lean Hogs opened lower and continued down to an early morning low that came close to closing the gap from the February 11th high at 93.025 to the February 12th low at 93.325 leading to a rebound rally that took price to the session high at 94.475. The rally stalled and broke down to the session low at 92.875, closing the gap and then coming back a touch to settle at 93.10. The rally couldn’t overcome the February 12th high and the breakdown took price back below the 93.50 support level. This puts pressure on bullish traders and has bears targeting the 92.375 support level. The breakdown came despite a strong showing from the morning cutout as traders must have thought we will see it fall back like it did the day before, in my opinion. The cutout actually strengthened a bit in the afternoon report and the index should continue higher. The cash index was strong and is approaching the February contract which expires on Friday. The cutout and cash market is strong compared to last year at this time period and could continue to build on its successful run. Slaughter numbers have been coming in below last year with weights in decline. It is expected to continue to fall short of last year and with a late Easter we could see pork demand continue to grow as retailers continue to prepare for the holiday. I believe the USDA was off base with its hog supplies on the last Hogs and Pigs report and we could continue to see a lag in production that will keep prices at higher levels than expected. This could keep futures moving higher as we get into the March -June time frame. We’ll see!… A breakdown from settlement could see price test support at 92.375 and the rising 8-DMA is nearby at 92.10. The 13-DMA, which is also rising is next support at 91.325. If price can overcome the key level at 92.375 it could re-test the February 12th high. A rally past here could see price test resistance at 95.30.
The Pork Cutout Index increased and is 98.21 as of 02/12/2025.
The Lean Hog Index increased and is at 87.08 as of 02/11/2025.
Estimated Slaughter for Thursday is 487,000, which is above last week’s 481,000 and last year’s 489,039. The estimated total for the week (so far) is 1,959,000, which is above last week’s 1,945,000 and last year’s 1,945,766.
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
bdicostanzo@walshtrading.com
www.walshtrading.com
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