Hog Weakness Continues at End of the Quarter
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June Lean Hogs opened lower and broke down to the low of the day at 93.70. The low was just above support at 93.50. Support held and the market reversed course and rallied to the session high at 96.525. The rally pushed past resistance at the rising 8-DMA at 96.25 but resistance held and it turned lower yet again before coming back and settling in the upper end of the range at 95.275. Settlement was below the key level at 95.30 and this could key the price action on Tuesday. The low was a new low for June since taking over as the lead contract (based on volume) but the market came back into the middle of the consolidation band with its rally unable to establish a down move. It was month end quarter end and the price action reflected the period end with its down ,up, down, up movement as parties squared up their positions. The range has a new low with today’s low and the high remains at 98.625. April 2nd is tariff day for the US, Canada and Mexico traders’ jitters were evident with the new low. But hope springs eternal and traders are on the lookout for any indication that the tariffs will be delayed or the last-minute negotiations will conclude with a deal. Aside from that little matter, we still have the grilling seasonal and the upcoming Easter holiday that could provide a spark for the hog market. We had, in my opinion, a bullish Quarterly Hogs and Pigs report so any positive news on tariffs could ignite a rally in Hogs. If the tariffs go through, we likely will see weakness but everyone will be watching the import/ export market to see what effects the tariffs are bringing to the table. How will cash prices be affected in the cutout and the cash index? What response will futures traders take as it gets closer to implementation and the after effects of the action? It will be an interesting April to be sure. We’ll see!... A breakdown from settlement could see price re-test support at 93.50. A breakdown from here could see price test support at the rising 13-DMA now at 92.60. If price can reclaim the key level at 95.30, it could re-test resistance at the rising 8-DMA. Resistance then comes in at 97.30.
The Pork Cutout Index down ticked and is at 96.46 as of 03/28/2025.
The Lean Hog Index decreased and is at 88.78 as of 03/27/2025.
Estimated Slaughter for Monday is 469,000, which is below last week’s 473,000 and above last year’s 360,973.
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Ben DiCostanzo
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