Walsh Trading Daily Insights
Commentary
October Lean Hogs is now the lead contract as its volume has surpassed the volume for the August contract. It opened higher and made the session low at 91.175. It grinded higher the rest of the session and made the high at the end of the day at 92.45. It settled at 92.40. The rally and settlement took hogs above resistance at 92.375. This puts a positive spin on the hog price action and if exports show improvement from last week’s debacle, we could see price continue to make its way higher. If Hogs can hold settlement, a test of resistance at 93.50 is possible. Resistance then comes in at 95.30. A breakdown from settlement could see support tested at 90.40 and resistance then comes in at 88.325.
The Pork Cutout Index increased and is at 120.05 as of 7/20/2021.
The Lean Hog Index increased and is at 112.33 as of 7/19/2021.
Estimated Slaughter for Wednesday is 474,000, which is above last week’s 467,000 and above last year’s 472,000. Tuesday’s slaughter was revised lower to 469,000. The estimated total for the week (so far) is 1,400,000, which is above last week’s 1,380,000 and below last year’s 1,415,000.
August Feeder Cattle continued its seesaw trading on Wednesday even though Corn was in neutral territory. It rallied off of Tuesday’s low and reached a high at 156.975 and settling at 156.775. One day down…one day up and one day down … one day up…. It is now just shy of the 157.30 – 157.90 resistance zone. If feeders can hold settlement, a re-test of the resistance zone from 157.30 – 157.90 is possible. Resistance then comes in at 160.625. A breakdown from settlement could see support re-visited at 156.075 and then 155.275. Support then comes in at 154.25 and then 153.50.
The Feeder Cattle Index increased and is at 150.90 as of 7/19/2021. Hasn’t updated…
October Live Cattle is now the lead contract as its volume has exceeded the August volume. In a third straight sleepy session of trading, it continued between trading the 124.30 support level and the 125.80 resistance level. The low was just below support at 124.125 and the high was just below resistance at 125.625. The market is waiting for and looking for a reason to trade…So far there isn’t any news driving this market…Cattle Inventory and cattle on feed come out after the close on Friday…. Could these reports key trade going forward???? Cash markets have been quiet and slaughter levels were revised lower both Monday and Tuesday as reports of worker shortages re-appear…?? A breakdown from settlement could see price re-test support at 124.30 and then possibly work its way down to support at 122.825. If price can hold settlement, a re-test of resistance at 125.80 is possible. Resistance then comes in at 126.625.
Boxed beef cutouts were higher as choice cutouts rose 0.36 to 265.24 and select increased 0.19 to 248.77. The choice/ select spread widened to 16.47 and the load count was 161.
Wednesday’s estimated slaughter is 117,000, which is below last week’s 119,000 and above last year’s 116,000. Tuesday’s slaughter was revised lower to 117,000. The estimated total for the week (so far) is 349,000, which is below last week’s 360,000 and above last year’s 348,000.
The USDA report LM_Ct131 states: hasn’t updated as I write
The USDA is indicating cash trades this week for live cattle from 118.25 – 121.50 and 195.00 – 200.00 on a dressed basis (so far).
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays (except holiday weeks) and our next webinar will be on Thursday, July 22, 2021 at 2:00 pm. It is free for anyone who wants to sign up and the link for sign up is below. If you cannot attend live a recording will be sent to your email upon completion of the webinar.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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