Large Supply Pressures HogsPosted 12/18/2018 11:45AM CT |
The hog market started the week lower after failing to hold Friday’s high of 66.80. Lower trade was seen today despite news over the weekend of two new cases of African swine fever in China. African swine fever could cause a bullish shift to the hog market but right now a large supply is pressuring the market lower. The February hogs are currently trading at a premium to the cash market which adds pressure to the downside. The USDA estimated hog slaughter came in slightly lower for the week but is still up from this time last year. The bulls are looking for China to import pork and other meats from the U.S. to make up for their loss in hog hear due to ASF. Until then look for the market to trade lower, with resistance at this week’s gap of 64.775.
UPDATE (12/21/2018) – If Monday’s low is broken trade lower should continue to support at 62.40 and then 59.675. Strong exports were reported on Thursday morning which could continue to help support if China becomes a buyer of US pork in 2019.
Lean Hogs Feb ’19 Daily Chart