Hogs Break Down

December Lean Hogs opened lower, made the high of the day at 77.50, and then broke down the rest of the session to the low at 75.20. It settled near the low at 75.80. The opening bounce failed to overcome resistance at 77.80 and the trade took a turn for the worse once it broke below the 50-DMA now at 77.20. The selloff put price into the lower end of the trading range that it hoped to be breaking away from with Friday’s solid trade. Hogs are in a trading range with the high at 77.90 and the low at 75.075. Settlement was above the key level at 75.60 and is circling around the short-term moving averages. Hogs, in my opinion needs to recover quickly on Tuesday to keep the price action in the trading range. A failure from 75.60 and then the low of the range could set Hogs and a more severe pull-back. A breakdown on Tuesday could test support at 74.25, with support next at 72.80. The indices continue to hover in the low end of its recent trading range. The seasonal is for weakness to arrive in the cash markets over the next couple weeks or so. Supply should grow and demand should weaken. So far, we are not seeing a big jump in supply and demand has held up fairly well between the consumer and exports. Weights aren’t surging as expected. But, for at least Monday, the seasonal fear seemed to work against futures and traders remembered that the Hogs and Pigs report showed larger near-term supply than expected by the estimates. We’ll See!... If price holds settlement, we could test resistance at 76.175. The 50-DMA is next and then 77.80. If price pushes past resistance at 77.80, we could test resistance at 78.80. Resistance is next at 79.80.

The Pork Cutout Index ticked higher and is at 95.11 as of 10/11/2024. 

The Lean Hog Index decreased and is at 84.29 as of 10/10/2024.

Estimated Slaughter for Monday is 479,000, which is above last week’s 471,000 and last year’s 479,068.

For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, October 15, 2024, 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.

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