December lean hog (HEZ25) futures present a selling opportunity on more price weakness.
See on the daily bar chart for December lean hog futures that a price uptrend appears to be rolling over. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bearish posture as the blue MACD line has just crossed below the red trigger line and both lines are trending lower.
Fundamentally, hog slaughter levels tend to seasonally rise in the early fall, while consumer grilling demand and the bacon, lettuce and tomato sandwich (BLT) season taper off. Recent declines in cattle futures (LEV25) (GFV25) markets are also a negative for the hog futures market.
A move in December lean hog futures below chart support at last week’s low of $86.525 would give the bears more power and it would also become a selling opportunity. The downside price objective would be $79.00 or below. Technical resistance, for which to place a protective buy stop just above, is located at $90.00.
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%):
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.
