Pig outlook: Lean hog futures prices again fail at stiff chart resistance
Analyst Jim Wyckoff shares an update on the US futures market, USDA reports and global pig news
6 January 2023
2 minute read
By: February lean hog futures prices have backed off sharply this week after challenging a stiff technical resistance layer around the $92.00 to $93.00 area. The bears are now back in near-term technical control. Fundamentally, pork cutout value fell 17 cents on Wednesday, but packers moved a strong 411.5 loads of product amid the lower prices. That’s the second straight day with strong movement, signaling there’s active retailer demand with the cutout in the mid-$80 range, which should help limit more sharp near-term pressure. The cutout value is virtually in line with year-ago, while the cash index is around $5 higher than last year at this time.
USDA’s Vilsack to announce new funding for expanding US meat processing capacity
States receiving investments: California, Illinois, Iowa, Kansas, Kentucky, Maine, Montana, Nebraska, New York, Ohio, Oklahoma, South Carolina, Texas, Virginia, Washington and Wisconsin. USDA says the funding is to make “agricultural markets more accessible, fair, competitive, and resilient for American farmers and ranchers.”
China’s sow herd continues to grow
China’s sow herd increased 0.2% in November from the month before to 43.88 million head, according to the country’s ag ministry. The sow herd was 2.1% larger than November 2021.
UK pork trade continues trending upwards in October - AHDB
Imports of pork to the UK totalled 67,700 tonnes in October, according to a report from AHDB analyst Freya Shuttleworth. This is a 12% increase from September and up 8% compared to October last year. Fresh/frozen pork continues to hold the largest share of volume at 27,900 tonnes, however this is 5% lower than volumes seen for the category for the same month in 2021. Strong increases continue in the processed, sausage and bacon categories where volumes are up 44%, 23% and 11% respectively year on year.
The next week’s likely high-low price trading ranges:
February lean hog futures--$80.00 to $88.00 and with a sideways-lower bias
March soybean meal futures--$443.40 to $476.10, and with a sideways-lower bias
March corn futures--$6.35 to $6.70 and a sideways-lower bias
Latest analytical daily charts lean hog, soybean meal and corn futures
