Hogs Pullback

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February Lean Hogs opened lower, rallied to the session high at 84.60 and then collapsed to the low at 82.40. It grinded higher the rest of the session to settle in upper end of the trading range at 83.85. The market put in the third leg of an Evening Star Candlestick formation with the rally Thursday and then Friday and the pullback on Monday. I will classify it as a weak formation as it settled in the upper end of the trading range on Monday. Friday’s high tested resistance on the February chart at the 50% retracement of the September 26^th high at 92.625 and the November 21^st low at 77.125 at 84.875. The Friday high was just above it at 85.075 and then pulling back to form a Doji candlestick after a strong rally on Thursday. The Monday breakdown took price down to support at the rising 8-DMA on the continuous chart (and the February chart) at 82.90 with the rally pulling price above the key level at 83.325 and weakening the bearish formation. This could lead to what Hogs like to do after a big move up or down and that is consolidate in a range. The rally came about in my opinion as we have had strong cutouts while we had high production levels with weights and slaughter numbers higher. This could be that with the African Swine Fever in Spain; the export business could be kicking into a higher gear as countries shy away from Spanish pork. Part of the pullback on Monday could be with last week the largest slaughter level in the past 3 years could finally lead to a softening of cash prices. Last week saw slaughter at 2,722,000 with weights up at 295.1 pounds, leading to 594 million pounds of production. So far, the cutout is hanging in and hasn’t pulled back. Slaughter started the week on the high end (see below) so we will watch the cutout and see if there is any pressure on the price. With the African Swine Fever pervasive in Europe and Asia, this could help the US reclaim some market share. China, however, may still be a longshot as the Chinese economy and its hog business is a mess, in my opinion. We’ll see!... If price can hold settlement, we could see a test of resistance 85.325. Resistance then comes in at the 61.8% retracement level at 86.70. A failure from settlement could see price test support at 83.325, the 38.2% retracement level at 83.05 and then the rising 8-DMA. Support then comes in the 13-DMA now at 82.10.

The Pork Cutout Index increased and is at 97.19 as of 12/12/2025. 

The Lean Hog Index increased and is at 82.80 as of 12/11/2025.

Estimated Slaughter for Monday is 494,000, which is above last week’s 482,000 and last year’s 485,648.

**Call me for a free consultation for a marketing plan regarding your livestock needs.**Ben DiCostanzo

Senior Livestock Analyst

Walsh Trading, Inc.

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