Walsh Trading Daily Insights
Commentary
August Lean Hogs was unable to take out the Tuesday high, making the high at 110.075 and then falling back, trading weaker the rest of the session to the low at 108.10. Settlement was near the low at 108.325. The price action created an inside candlestick with the range between Tuesday’s high and low. The market is stuck between resistance at 109.85 and support at 107.925. Hogs were unable to follow through on the stronger cash market activity as traders seem wary of taking futures past the cash index at this time. A rally past the Tuesday high could see price test resistance at 111.675. A failure from settlement could see price revisit the Tuesday low. Support then comes in at 106.85.
The Pork Cutout Index increased and is at 110.73 as of 6/21/2022.
The Lean Hog Index increased and is at 110.45 as of 6/20/2022.
Estimated Slaughter for Wednesday is 469,000, which is below last week’s 472,000 and last year’s 473,000. The estimated total for the week (so far) is 1,386,000, which is below last week’s 1,401,000 and last year’s 1,414,000.
August Feeder Cattle was unable to capitalize on Tuesday’s rally. It opened lower, made the high at 175.35 and worked its way lower the rest of the session to the low at 172.875. It settled at 173.15. It closed the gap from the Friday high at 173.70 to the Tuesday low at 174.15. With futures still at a stiff premium to the cash index, traders knocked futures back as the price action may have gotten ahead of itself. A break down from settlement could see support tested at 172.00. If price can reclaim resistance at 173.325, we could see a test of the Wednesday high. Resistance then comes in at 175.70.
The Feeder Cattle Index increased and is at 165.21 as of 6/21/2022.
August Live Cattle gap opened lower, closed the gap as it made the high at Tuesday’s low (135.975) and grinded lower the rest of the session to the low at 134.85. It settled near the low at 134.925. Price broke down below the 200-DMA at 135.775 and is poised to test support at 134.55 if it can’t reverse course on Thursday. Cash is trading in a wide range, with the lows in the south at 137.00 and so far, lower highs from last week in the North at 145.50. A failure from settlement could see price test support at 134.55. Support then comes in at 132.95. If settlement holds, we could test the 200-DMA and then resistance at 136.35.
Boxed beef cutouts decreased as choice cutouts decreased 0.99 to 266.57 and select decreased 0.71 to 245.99. The choice/ select spread narrowed and is at 20.58 and the load count was 157.
Wednesday’s estimated slaughter is 126,000, which is even with last week and above last year’s 116,000. The estimated total for the week (so far) is 376,000, which is above last week’s 368,000 and last year’s 355,000.
The USDA report LM_Ct131 states: So far for Wednesday in Kansas negotiated cash trading has been slow on moderate demand. Compared to last week the bulk of live purchases traded 2.00 lower at 138.00. In the Texas Panhandle, Nebraska and Western Cornbelt negotiated cash trading has been limited on light demand. In the Western Cornbelt a few dressed purchases traded at 240.00. In Colorado negotiated cash trading has been mostly inactive on very light demand. Not enough purchases in any of these regions for a full market trend. In the Texas Panhandle Tuesday was the last reported market with live purchases at 138.00. For the prior week in the Northern Plains and Western Cornbelt live purchases traded at 145.00 and, in Nebraska and Western Cornbelt, dressed purchases traded at 230.00.
The USDA is indicating cash trades for live cattle from 137.00 – 145.50 and from 228.00 – 240.00 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 Friday, June 24, 2022 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.
Direct: 312.957.4163
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