Hogs Crash

Hogs & Pork - Brown and white piglet

August Lean Hogs opened lower at the high of the day (89.15) and crashed. It traded lower the entire session, making the low at 86.275. It settled near the low at 86.725. I am beginning to sound like a broken record as the cash market trouble continue. Cutouts and the cash market have seemingly peaked and have been moving lower. The futures market seems to have given up on the hogs as we are trading futures at a discount to the index. Futures traders are saying the cash market has dug a hole and can’t make its way out of it. Slaughter levels are strong and weights are high keeping production at high levels.  Our slaughter and production have been going up instead of the expected going down. It is a wonder the cutouts have remained as strong as it has with the production the market has produced, in my opinion. Our exports have been strong, but US demand hasn’t kept pace in my opinion.  Expectations were for cutouts and cash to soar above 100, into the teens but that hasn’t happened and now we are seeing cutouts below 100 and the cash index threatening to break below 90. Not a good season for hogs. We have the Hogs and Pigs report out after the close on Thursday which could give some information on inventory. Hogs settled below support at 87.10 which keeps bears in control of the market. A failure from settlement could see price test support at 85.325. If price can recover and get above resistance at 87.10, we could test resistance at 88.325.

The Pork Cutout Index decreased and is at 98.31 as of 06/21/2024. 

The Lean Hog Index decreased and is at 90.32 as of 06/20/2024.

Estimated Slaughter for Monday is 473,000, which is above last week’s 459,000 and last year’s 438,497.

For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, June 25, 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.

Direct: 312.957.4163


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