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December Lean Hogs opened lower and rallied to the session high at 65.675. It reversed course and grinded lower the rest of the session to the low at 64.65. It settled just above the low at 64.675. Hog production continues to impress as weights and slaughter levels remain on the high side, in my opinion. The cutout and cash market remain under pressure as the bearish production levels are outpacing demand for pork. Pork exports are steady to good for the producer, while consumer demand in the US is indifferent. Consumers continue to favor beef even at its high prices and the commodity known as chicken over pork. Managed money has maintained near record short positions with the fundamentals in a weakened position. With the high level of short positions you would think we should see a strong short-covering rally but, with the inability of the cutout and cash market to gain any traction, it looks like the shorts are comfortable holding on. We need to see a reversal in the cash prices to loosen the shorts hold on the futures market in my opinion. We’ll see!... The opening rally couldn’t take out the Friday high at 65.875. The break down took price past support at 64.80. A failure from settlement could see price test support at 63.325. Support then comes in at 61.85. If price can re-take 64.80 resistance, it could re-test resistance at the Friday high. Resistance then comes in at the declining 8-DMA now at 66.10. A rally past here could see at test of resistance at 66.55.
The Pork Cutout Index decreased and is at 76.19 as of 10/23/2026.
The Lean Hog Index decreased and is at 71.16 as of 10/22/2026.
Estimated Slaughter for Monday is 496,000, which is above last week’s 476,000 and last year’s 490,188.
Trade Idea:
Buy the February 2027 Lean Hog 74 call
Sell the February 2027 Lean Hog 80 vs 74 put spread.
Cost to Entry - $1,250 credit plus commissions and fees.
Margin $1,075 per spread.
Maximum risk at option expiration : $1,150 plus trade costs and fees.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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