Hog futures experienced a sharp reversal with the expiring July contract surging $2.475 to reach $101.275 and the most-active August contract leaping $3.40 to $97.575. This rally was driven by renewed wholesale strength and positive market conditions, indicating sustained cash market strength in the short term.
The hog index has not provided a clear direction, as recent gains have fallen short of those seen after July 4. However, the Chicago Mercantile Exchange (CME) confirmed a price of $98.15, up 72 cents, and a preliminary calculation of $98.66 on Monday. The closing price of the July futures contract suggests continued strength until its expiration on July 17.
A mid-session pork quote played a significant role in the futures market's strength, as pork belly values saw a substantial increase. This led to gains across the board, with the pork cutout rising $4.25 to $112.20, reaching its highest level since August of the previous year. Sustained pork strength is expected in the coming weeks due to lower slaughter totals, while consumer demand is anticipated to remain relatively strong in the short term.
From a technical perspective, the rally in August hog futures reinforces the bullish advantage in the short term. Initial support is expected around the previous week's close of $97.45, with further support near today's low of $94.35. On the upside, resistance levels include the July 5 high of $98.475, the psychological $100.00 level, and the July 6 high of $100.75. A breakout above $100.75 could potentially lead to a test of the $105.00 level.
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Categories: Ohio, Livestock, Hogs