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June Lean Hogs hole opened greater and ticked to the session excessive at 98.225 after which broke all the way down to an early low the place it reversed and retraced virtually 61.8% of the vary for the early morning commerce. The market then turned decrease and traded to the session low at 95.625. It settled close to the low at 95.775. The hole open greater was an aggressive response to the Quarterly Hogs and Pigs report, taking worth close to the earlier highs and resistance earlier than capitulating and buying and selling again all the way down to the decrease finish of the buying and selling band. The value motion stays caught inside its buying and selling vary from 98.625 to the low at 94.20. It as soon as once more failed to carry onto its early transfer as merchants appear to be prepared to attend for subsequent week’s tariff choices from all of the events. April 2nd is tariff day and it might play an essential function within the subsequent directional transfer within the hog market. Canada and Mexico had been two of the highest gamers in final week’s export report and Brazil has been probing and making an attempt to take a extra distinguished function within the export combine. Except for that little matter, we nonetheless have the grilling seasonal and the upcoming Easter vacation that would present a spark for the hog market. With pork a lot decrease than beef in worth might we see a significant enhance in demand for pork? With the potential export points in play, we would wish to see the retail trade characteristic pork aggressively and get shoppers to purchase the less expensive than beef protein product. We’ll see!… A breakdown from settlement might see worth re-test assist at 95.30. A breakdown from right here might see worth take a look at assist at 93.50. If worth can maintain settlement, it might re-test resistance at 97.30. Resistance then is available in at 98.475.
The Pork Cutout Index decreased and is at 96.52 as of 03/27/2025.
The Lean Hog Index was unchanged and is at 89.13 as of 03/26/2025.
Estimated Slaughter for Friday is 471,000, which is above final week’s 466,000 and final 12 months’s 439,617. Saturday slaughter is anticipated to be 70,000, which is under final week’s 158,000 and above final 12 months’s 15,847. The estimated complete for the week is 2,480,000, which is above final week’s 2,422,000 and final 12 months’s 2,393746.
Could Feeder Cattle opened decrease and rallied to the session excessive at 287.175. This took worth to simply above resistance at 286.55 briefly after which it pulled again and traded to the session low at 284.25 by late morning. It consolidated close to the low and settled at 285.175. The breakdown pressured assist on the rising 13-DMA now at 284.60 and it was capable of maintain with settlement simply above it. This might key the worth motion on Monday as worth has been buying and selling under it and coming again to settle above it. The opposite short-term shifting common… the 8-DMA has been hamstringing the upside over the previous three days. It’s rising and is at 286.00. The index has been shifting up and down in a good vary round 287.00 since making its latest all-time excessive at 287.78 on March 21st. With the excessive gross sales costs in lots of areas, it’s a little shocking to see the index on this vary. We’ll see!… A breakdown from the 13-DMA might see worth take a look at assist at 282.35. Assist then is available in on the rising 21-DMA now at 281.05. If settlement holds, we might re-test resistance on the 8-DMA and 286.55. Resistance then is available in at 288.00.
The Feeder Cattle Index decreased and is at 286.76 as of 03/27/2025.
June Stay Cattle opened decrease and traded to the low at 204.475. Merchants reversed worth greater and took it to the session excessive at 206.35. This topped Thursdays 206.225 excessive and resistance at 205.55. Merchants couldn’t keep the passion and worth broke down and neared the session low. It drifted the remainder of the session and settled close to the low at 204.85. With the lead contract beneath the all-time excessive for the lead contract (207.725), merchants appear nervous that the excessive received’t be overtaken. They’re hoping the money market will take the lead and soar giving futures the motivation to go greater. The money market was largely in a gradual with final week vary and that disillusioned merchants for my part. They simply let futures drift within the higher finish of Thursday’s vary, prepared to attend till subsequent week’s money determination to maneuver worth. With the money market unable to take money to greater ranges this week, there’s fear {that a} prime might be in place. Exports had been at a advertising 12 months low and with cutouts at excessive ranges this might proceed to fester. Cattle provides are tight, however there are worries the packer will do one thing to alter the main target from the tight provides. What that might be, nobody is aware of however there’s all the time that angst on the market particularly since they’re supposedly getting crushed with their margin. Beef costs are excessive and lots of are nervous concerning the client and whether or not they can proceed to maintain demand for beef excessive. We do have seasonals coming into play, with the retail trade preparing for grilling season. Will they proceed to characteristic beef on the expense of pork or will they cave and proceed to elevate costs to all-time highs? The buyer has been doing an excellent job of consuming beef to this point this 12 months. However the inventory market has been hit and commerce tensions are percolating inflicting a drop in client confidence. Will this result in them consuming extra beef to make themselves really feel higher or will it drive them to cheaper alternate options? We’ll see!… If worth trades under the low, it might take a look at assist on the rising 8-DMA now at 203.725. Assist is subsequent at 203.50 and the rising 13-DMA is close by at 202.975. If worth can take out the Friday excessive, it might method resistance on the all-time excessive at 207.725 for the lead contract.
Boxed beef cutouts had been decrease as selection cutouts fell 2.90 to 332.82 and choose decreased 0.76 to 318.68. The selection/ choose unfold narrowed and is at 14.14 and the load rely was 133.
Friday’s estimated slaughter is 107,000, which is above final week’s 100,000 and final 12 months’s 96,918. Saturday slaughter is anticipated to be 17,000, which is under final week’s 20,000 and above final 12 months’s 5,055. The estimated slaughter for the week (to this point) is 609,000, which is above final week’s 560,000 and final 12 months’s 582,209.
The USDA report LM_Ct131 states: To this point for Friday within the Texas Panhandle, negotiated money commerce has been largely inactive on mild demand. In Kansas and the Western Cornbelt, negotiated money commerce has been mild on reasonable demand. A couple of stay FOB purchases in Kansas traded at 209.00. Final week within the Southern Plains stay FOB purchases traded at 210.00. Final week within the Western Cornbelt, stay FOB purchases traded from 212.00-215.00 and dressed delivered purchases traded at 335.00. Negotiated money commerce in Nebraska has been mild on reasonable to good demand. In comparison with final week, on a lightweight take a look at, dressed delivered purchases traded regular to 10.00 greater from 335.00-345.00. A couple of stay FOB purchases traded at 213, nevertheless, not sufficient for a full market pattern. Final week in Nebraska, stay FOB purchases traded from 212.00-215.00.
The USDA is indicating money trades for stay cattle from 206.00 – 214.00 and from 330.00 – 345.00 on a dressed foundation (to this point).
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Ben DiCostanzo
Senior Market Strategist
Walsh Buying and selling, Inc.
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