October lean hog futures on the Chicago Mercantile Exchange early this week have seen profit-taking pressure from recent gains that last Friday scored a new contract high of $78.75. No serious chart damage has occurred during the sell off as an uptrend from the July 1 low of $68.40 remains in place. The lean hog bears would begin to gain some fresh downside technical momentum by producing a close below solid support at $75.00. Below that lies strong trend-line support at the $74.00 area. Some near-term chart damage would begin to be inflicted in October hogs with a close below trend-line support at $74.00.
On the upside, chart resistance is located at the June high of $77.40 and then at the contract high of $78.75.
Seasonality studies do show hog futures prices peaking out in the August timeframe and then declining markedly into the November timeframe.
