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February Lean Hogs opened lower and traded to the low of the day at 84.20. It turned higher and worked higher the rest of the session to the high at 85.75. It settled near the high at 85.675. The rally took price above resistance at 85.325 as Hogs were able to ignore weaker export sales and declining cutout and cash indices to continue to narrow the discount futures have to the Lean Hog Index. The higher price is also a new high on the continuous chart. This puts resistance at 87.10 and the rising 200-DMA now at 87.25 in traders’ crosshairs. The bullishness comes about as the US Dollar continues to rise putting exports in danger of potentially continued declines as our partners currency devalues versus the Dollar. The cutout continued its decline on Friday and the cash index also looks lower for Monday. Traders seem to be paying more attention to the unseasonally weaker slaughter numbers as the USDA’s Hogs and pigs report estimates for heavier weight hogs hasn’t materialized in larger slaughter numbers, in my opinion. I think they are waiting for surging cutouts and higher cash, which hasn’t happened. Maybe it’s the late Thanksgiving holiday that they may think lends support to hogs. We still have a scenario that could lead to lower hog prices as demand for pork usually weakens after Thanksgiving going into New Year’s. We’ll see!… If price breaks down from the key level at 85.325, it could test support at 83.325. Support then comes in at the rising 8-DMA now at 82.75 and then the rising 21-DMA now at 82.35. If price can get hold settlement, it could test resistance at 87.10 and then the 200-DMA.
The Pork Cutout Index decreased and is at 95.17 as of 11/21/2024.
The Lean Hog Index decreased and is at 87.44 as of 11/20/2024.
Estimated Slaughter for Friday is 485,000, which is above last week’s 484,000 and last year’s 448,900. Saturday’s slaughter is expected to be 138,000, which is below last week’s 230,000 and last year’s 349,933. The estimated slaughter for the week (so far) is 2,565,000, which is below last week’s 2,638,000 and above last year’s 2,221,365.
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
bdicostanzo@walshtrading.com
www.walshtrading.com
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