December Lean Hogs opened lower, rallied to the high of the session at 93.80, and then broke down to the low at 72.40. It consolidated the rest of the session and settled at 73.275. It was a new low for the recent decline, testing support at 72.80 and holding with settlement above it. The cash market continues to meander to the downside but is still holding near the lows of its recent range. There is hope the market will continue to be supportive and hold together as production has fallen with slaughter levels moving lower than expected. The early rally stalled in the middle of Friday’s trading range as it consolidated at its recent lows. If price breaks down from settlement, it could re-test support at 72.80. A breakdown from here could see the 71.825 – 71.325 band tested. If price holds settlement, we could test resistance at 74.25. Resistance is next at 75.60 and then 76.175.
The Pork Cutout Index increased and is at 94.48 as of 09/27/2024.
The Lean Hog Index ticked lower and is at 84.03 as of 09/26/2024.
Estimated Slaughter for Monday is 485,000, which is above last week’s 479,000 and below last year’s 487,294.
November Feeder Cattle opened lower and rallied to the session high at 246.55. It broke down the rest of the session to the low at 244.20. It settled near the low at 244.90. The rally once again took price past resistance at 245.75 and just failed to get past the 200-DMA on the continuous chart at 246.725. It also failed to overtake the Friday high, and the breakdown tested support at the rising 8-DMA now at 244.725. With the index moving higher traders felt the need to consolidate after making a new high for the recent up move on Friday at 247.00. If price holds settlement, it could retest resistance at 245.75 and then the 200-DMA. Resistance then comes in at 248.875. A breakdown below the 8-DMA could see a test of support at the declining 50-DMA now at 243.175.
The Feeder Cattle Index increased and is at 247.24 as of 09/27/2024.
December Live Cattle opened lower and made the session low at 183.975. The market reversed course and rallied to the high at 185.20. It consolidated and settled near the high at 184.80. The early weakness tested support at the rising 8-DMA now at 183.90 and the bounce took price past resistance at 184.35 and failing to take out the Friday high at 185.60. We have a potential strike starting on October 1st with the East Coast and Gulf Longshoremen wanting higher pay and assurances that automation won’t put them out of work. Traders have been ignoring this strike which could hinder beef and pork exports. Cutouts have weakened but are starting to stabilize and this is the start of a new month and more packer contracts coming up. There is a mixed feel about the market as the contracted cattle could limit cash prices but with many believing the packer still short cattle could lead to more aggressiveness out of the packers to fill orders ass the load counts have been strong. We’ll see!… If price can’t hold settlement, it could test support at the rising 8-DMA. Support then comes in at 182.575. If settlement holds, we could see price re-test resistance at 185.75. Resistance then comes in at 187.725.
Boxed beef cutouts were higher as choice cutouts increased 1.39 to 298.08 and select increased 2.45 to 284.53. The choice/ select spread narrowed and is at 13.55 and the load count was 102.
Monday’s estimated slaughter is 119,000, which is above last week’s 118,000 and below last year’s 123,125.
The USDA report LM_Ct131 states: ***This report is late due to technical difficulties***
The USDA is indicating no cash trades for live cattle and on a dressed basis (so far). Because of technical difficulties.
For those interested I hold a weekly livestock webinar on Tuesdays and my next webinar will be Tuesday, October 01, 2024, 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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