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June Lean Hog Futures Just Hit a 3-Week High. Here Are the Levels to Watch Before You Buy.
June lean hog futures (HEM25) present a buying opportunity on more price strength.
See on the daily bar chart for the June lean hog futures that prices are now trending up and on Wednesday hit a three-week high. Recent price action has also formed a bullish V-bottom reversal pattern on the daily bar chart.
Fundamentally, rising pork cutout values have been bullish for hog futures, along with a coinciding increase in pork movement indicating solid consumer demand. Retailers are ramping up pork purchases for the summer grilling season. Elevated beef prices at the meat counter, amid a recent decline in consumer confidence readings, suggest there will likely be more substitution demand for pork over beef in the coming weeks.
A move in the June lean hog futures above chart resistance at $98.50 would become a buying opportunity. The upside price objective would be $108.00, or above. Technical support, for which to place a protective sell stop just below, is located at $94.00.
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.
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.