Walsh Trading Daily Insights
Commentary
February Lean Hogs gap opened lower and kept on falling. The high was at 80 925 and the breakdown took futures to the session low at 78.175. It settled at78.225. The gap is from the Monday high to the Friday low at 81.20. Settlement was below support at the 50 DMA (78.925) and the 78.80 support level. A failure below 78.80 could see price test support at 77.80. Support then comes in at 76.75. If price could overtake the 50 DMA on a rebound, we could revisit resistance at 79.80. Cash market remains weak despite excellent exports and consumer demand.
The Pork Cutout Index decreased and is at 85.35 as of 12/03/2021.
The Lean Hog Index decreased and is at 70.53 as of 12/02/2021.
Estimated Slaughter for Monday is 460,000, which is below last week’s 483,000 and last year’s 488,000. Friday Slaughter was revised lower. Saturday slaughter was revised lower to 260,000. The weekly estimated total for last week is 2,657,000.
January Feeder Cattle opened lower, made an early high and then broke down to the session low at 162.825. It reversed course and rallied the rest of the session to the high at 165.575. It settled nearby at 165.25. The early breakdown took price below support at 163.50 and the rally took price just shy of resistance at 165.775. If Feeder Cattle can get past resistance at 165.775, we could re-test resistance at 167.15 and then the Monday high at 168.30. A failure from settlement could see price re-test support at 163.50. Support then comes in at 162.00.
The Feeder Cattle Index decreased and is at 160.43 as of 12/03/2021.
February Live Cattle opened lower and dipped to the low for the day at 138.45. It worked higher the rest of the session to the high at 139.90. Settlement was at 139.65. The low was just below support at 138.60 and the rally stopped just short of resistance at 140.175. It is encouraging that cash starts the week with a 140.00 trade. A rally past resistance at 140.175 could see price work its way to the November 29 high at 141.85. Resistance then comes in at 142.25. A failure from settlement could see price re-visit the Monday low. Support then comes in at 136.35.
Boxed beef cutouts were lower as choice cutouts decreased 1.83 to 272.53 and select decreased 0.79 to 257.85. The choice/ select spread narrowed to 14.68 and the load count was 116.
Monday’s estimated slaughter is 122,000, which is above last week’s 121,000 and last year’s 119,000.
The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been mostly inactive on very light demand in the Western Cornbelt, not enough purchases for a market trend. Negotiated cash trade has been at a standstill in all other major feeding regions. Last week in the Southern Plains and Colorado live purchases traded at 142.00. In Nebraska and the Western Cornbelt last week live and dressed purchases traded at 140.00 and 220.00, respectively.
The USDA is indicating cash trades for live cattle at 140.00 and nothing 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, December 9, 2021 at 3:00 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.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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