July lean hog futures (HEN25) present a buying opportunity on more price strength.
See on the daily bar chart for July lean hog futures that prices have made a strong rebound from the April low, are now trending higher, and hit a six-week high on Tuesday, April 22. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture as the red MACD line has just crossed above the blue trigger line. Lean hog bulls have the overall near-term technical advantage.
Fundamentally, the news out Tuesday afternoon that President Donald Trump wants to deescalate trade tensions with China and wants lower tariffs is a bullish development for hog futures. China is a major importer of U.S. pork. Also, with beef prices at historically elevated levels, less expensive pork prices at the meat counter are likely to draw better consumer substitution demand for pork over the higher-priced beef cuts in the coming weeks.
A move in July lean hog futures prices above chart resistance at this week’s high of $100.625 would become a buying opportunity. The upside price objective would be $109.00 or above. Technical support, for which to place a protective sell stop just below, is located at $97.00.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
