US: Lean hog futures bump up against strong chart resistance

Once again, February lean hog futures rallied right up to a strong technical resistance layer located between $92.00 and $93.30, and backed well down. Fundamentally, the CME cash hog index is still seeking a seasonal bottom. The latest CME lean hog index is down 16 cents (as of Dec. 6), signaling a seasonal low is not yet in place. December lean hog futures finished Wednesday at a modest discount to the cash index, signaling traders aren’t yet convinced a seasonal bottom is at hand. This week’s hog slaughter will likely be large on a seasonal basis and the total for the following week likely will be the largest of the year. That would reflect a seasonal supply peak, as well as active packer operations as they prepare for widespread shutdowns and slowdowns during the year-end holidays. However, the market is unlikely to spend much time at such low levels as the industry gets back to full work schedules in the new year. The industry will also get a better look at the 2023 hog supply ...