Walsh Trading Daily Insights
Commentary
June Lean Hogs opened lower and broke down to a new low for the down move at 99.50. The decline took price below support at 100.075. Price reversed course and raced higher, making the high of the day at 101.90. With resistance nearby at 101.975 and the rising 200-DMA at 102.60, the rally came to a halt and Hogs consolidated the rest of the session and settled in the middle of the range at 100.85. If price fails at settlement, we could see a re-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 103.77 as of 5/10/2022.
The Lean Hog Index was unchanged and is at 101.09 as of 5/09/2022.
Estimated Slaughter for Wednesday is 482,000, which is even with last week and above last year’s 472,000. The estimated total for the week (so far) is 1,423,000, which is below last week’s 1,444,000 and last year’s 1,430,000.
August Feeder Cattle gap opened lower, attempted to close the gap and then broke down to the session low at 169.30. This is just below support at 169.95 and the rising 21-DMA now at 169.35. The 21-DMA held and price raced to the session high at 171.50 which is just below the Tuesday low at 171.55. This leaves a gap in place and the failure to close the gap saw price breakdown once again below 169.95. Price was able to settle above 169.95 at 170.00. If price can hold settlement, we could see a test of resistance at the gap and then 172.00. Resistance then comes in at 173.325. A failure below the rising 21-DMA, could see price test support at 167.15.
The Feeder Cattle Index ticked lower and is at 156.24 as of 5/10/2022.
June Live Cattle opened higher and dipped to the low of the day at 132.35. Price reversed course and rallied past resistance at 134.35 to the session high at 134.875. It couldn’t challenge the rising 200-DMA now at 135.00 and quickly turned lower and traded lower the rest of the session and it settled in the middle of the range at 133.575. With the cash market hanging around steady, it is disappointing that the futures market can’t hold onto rallies. Settlement was above 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 holds settlement, we could see price re-test resistance at 134.35. Resistance then comes in at the rising 200-DMA 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 dipped as choice cutouts down ticked 0.16 to 255.08 and select down ticked 0.17 to 242.18. The choice/ select spread widened and is at 12.90 and the load count was 185.
Wednesday’s estimated slaughter is 125,000, which is below last week’s 126,000 and above last year’s 119,000. The estimated total for the week (so far) is 371,000, which is above last week’s 363,000 and last year’s 351,000.
The USDA report LM_Ct131 states: So far for Wednesday in the Texas Panhandle, Nebraska and Western Cornbelt negotiated cash trading has been slow with moderate demand. In the Texas Panhandle, compared to the last reported market on Tuesday, live purchases traded steady at 140.00. In Nebraska, compared to the last reported market on Tuesday, live and dressed purchases traded steady at 144.00 and 230.00, respectively. Not enough purchases in the Western Cornbelt for a market trend. For the prior week live and dressed purchases traded from 144.00-147.00 and from 230.00-232.00, respectively. Thus far Wednesday in Kansas and Colorado negotiated cash trading has been mostly inactive on light demand. Not enough purchases for a market trend. In Kansas the last reported market was on Tuesday with live purchases at 140.00. In Colorado last week live purchases traded from 142.00- 148.00.
The USDA is indicating cash trades for live cattle from 138.00 – 148.00 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
888.391.7894
Fax: 312.256.0109
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