Walsh Trading Daily Insights
Commentary
June Lean Hogs opened strong, trading to the session high at 102.725 and then broke down and made a new low for the down move at 100.15. It recovered and settled at 101.575. The initial surge tested resistance at 101.975 and the rising 100-DMA at 102.40. The failure took price to just above support at 100.075. Settlement was below resistance, keeping the pressure on hogs. If price fails at settlement, we could see a test of support at 100.075. Support then comes in at 98.475. A rally past resistance at the 100-DMA could see price visit resistance the gap from the Friday low at 103.70 to the Monday high at 103.35. Resistance then comes in at 104.35.
The Pork Cutout Index decreased and is at 104.97 as of 5/09/2022.
The Lean Hog Index ticked lower and is at 101.09 as of 5/06/2022.
Estimated Slaughter for Tuesday is 480,000, which is even with last week and below last year’s 481,000. Monday’s slaughter was revised lower to 461,000, which brings the estimated total for the week (so far) to 941,000, which is below last week’s 962,000 and last year’s 958,000.
August Feeder Cattle opened higher, traded to the session high at 174.85 and then broke down the rest of the day to the low at 171.55. The breakdown once again took price below support at 172.00 and it settled below it at 171.85. If price can reclaim 172.00, we could see a test of resistance at 173.325. Resistance then comes in at 175.70. A failure below the low, could see price test support at 169.95.
The Feeder Cattle Index ticked higher and is at 156.33 as of 5/09/2022.
June Live Cattle gap opened higher and traded to the high of the day at 134.35. This was right at resistance at 134.35. Price reversed course and broke down the rest of the session to the low at 132.05. It settled near the low at 132.40. Settlement was below support at 132.95 and a breakdown from here could see price re-test the Monday low at 131.025 and then support at 130.45. If price gets above resistance at 132.95, we could see price re-test resistance at 134.35. Resistance then comes in at the rising 200-DMA now at 134.975 and then 136.35. There is a gap from the April 22nd low at 138.35 and the April 25th high at 136.85.
Boxed beef cutouts were lower as choice cutouts dropped 3.05 to 255.24 and select decreased 0.78 to 242.35. The choice/ select spread narrowed and is at 12.89 and the load count was 202.
Tuesday’s estimated slaughter is 125,000, which is below last week’s 126,000 and above last year’s 1119,000. The estimated total for the week (so far) is 246,000, which is above last week’s 237,000 and last year’s 232,000.
The USDA report LM_Ct131 states: So far for Tuesday in the Southern Plains negotiated cash trading has been light to moderate with moderate demand. In the Texas Panhandle live purchases have traded steady to 1.00 lower from 139.00-140.00, when compared to last week. In Kansas live purchases have traded steady at 140.00, when compared to the prior week. In the Northern Plains negotiated cash trading has been limited on light demand. Not enough purchases for a market trend. In the Western Cornbelt negotiated cash trading has been at a standstill. Last week in Nebraska live and dressed purchases traded at 146.00 and 232.00, respectively. In Colorado live purchases traded from 142.00-148.00. In the Western Cornbelt week live and dressed purchases traded from 144.00-147.00 and from 230.00- 232.00, respectively.
The USDA is indicating cash trades for live cattle from 138.00 – 140.50 and from 222.00 – 230.00 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, May 12, 2022 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
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Fax: 312.256.0109
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