Walsh Trading Daily Insights
Commentary
July Lean Hogs made a new low for the down move early in the trading session, falling to 48.175 and then reversing course and rallying the remainder of the session to the high of the day at 49.85. It settled nearby at 49.65, unchanged from Tuesday’s settlement. Support for July Lean Hogs on Thursday is at 49.35, 47.825 and then 46.30. Resistance is at 50.475, 51.80 and then 53.825. The Pork Cutout Index and the Lean Hog Index continued their decline. The Pork Cutout Index fell and is at 67.43 as of June 16, 2020. The Lean Hog Index decreased and is at 48.10 as of June 15, 2020. Estimated Slaughter for Wednesday is at 460,000, this is above last week’s slaughter of 450,000 and below last year’s slaughter at 479,000. August Feeder Cattle opened lower, made the low at 131.70 and was able to bounce back and settle in positive territory at 133.575. This is just above the key level at 133.50. Thursday has support at 132.075, 131.10 and then 129.65. Resistance is at 134.25, 135.60 and then 136.75. The Feeder Cattle Index decreased and is at 128.41 as of 6/16/2020. August Live Cattle traded in a tight 96.95 – 95.75 trading range. It settled at 96.85. Support is at 96.10, 94.30 and then 92.15. Resistance is at 97.075, 99.375 and then 100.275. Boxed beef cutouts continued its descent from record levels. Choice cutouts fell 9.96 to 217.93 and select declined 5.09 to 208.08. The choice/ select spread narrowed to 9.85 and the load count was 200. Choice cutouts fell below last year’s June 17th value which was at 221.82 while select is still above the same date’s 202.51. Wednesday’s estimated slaughter is 120,000, above last week’s 116,000, and just below last year’s 122,000. Slaughter levels are now in normal range (117,000 and up) but will need higher Saturday slaughter to start eating into the back log of cattle. The USDA report LM_Ct131 states: Thus far Wednesday trade and demand were moderate in all feeding regions. In the Texas Panhandle compared to Tuesday, live purchases traded steady to 2.00 higher from 100.00-102.00, bulk at 102.00. In Kansas compared to last week, live purchases traded 2.00-6.00 lower from 100.00 -102.00, bulk at 102.00. In Nebraska compared to last week, live purchases traded 2.00-6.00 lower from 100.00-102.00, bulk at 102.00. Compared to Tuesday, dressed purchases traded mostly 2.00 higher from 160.00-162.00. In the Western Cornbelt compared to Tuesday, dressed purchases traded mostly 2.00 higher from 160.00-162.00. The latest established live market in the Western Cornbelt was on Tuesday with live purchases from 99.00-102.00. The range for the week so far is for live cattle – 98.00 to 105.00 and dressed 157.00 to 165.00.
Trade Suggestion(s)
Risk/Reward
Futures N/A
Options N/A
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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