Hog Prices Higher But Exports Needed To Sustain Rally
Fundamentals
Lean Hog futures prices have staged a recovery from 2016 lows, as market sentiment has turned positive for the time being.? Lean Hogs have been the leader during the recent rally in the livestock sector as seasonal factors and strong retail demand for hams are helping to increase meat packer demand for market ready Hogs. However, in order for Hog price to continue to hold recent gains, we will need to see U.S. pork exports improve which could be a challenge in 2016 year given the current global economic situation. About a quarter of U.S. pork production is exported, with Mexico, Japan and Canada the leading buyers. China imported less U.S, pork last year down over 17% from 2014. The U.S. will need exports increase to help absorbs what is expected to be increased meat production across pork, beef and poultry.
Technical Notes? – View Today’s Chart
Looking at the daily chart for April Lean Hogs, we notice prices in a sustained uptrend following a nearly 2-month long price consolidation in November and December of last year. The 20-day moving average (MA) has crossed above the 200-day MA which is normally considered a bullish formation, but there are some other technical factors such as a moderate price reversal on Thursday following a move to 3 ? month highs and a bearish divergence forming in the 14-day RSI that could signal a near-term correction may be near. 73.975 is seen as the next resistance level for the April contract with support seen at 67.900.?
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