Walsh Trading Daily Insights
Commentary
June Live Cattle gap opened lower and went limit down early in the trading session as weakness in outside markets affected the price action. The market grinded higher and by late session it nearly closed the gap created earlier, making the high at 84.80, just .075 away from closing the gap from Monday’s low. It settled at 84.075 and formed a hammer candlestick. The recovery off the low could be a positive sign that the market is getting accustomed to the lower slaughter levels and maybe its starting to price it in as the recovery took place in spite of continued negative price action in the outside markets. Hogs settled positive in its front contract so hopefully this could lead to a recovery in the livestock markets as even the August Feeder Cattle made its session high at the end of the day. August Feeder Cattle also ended in a hammer candlestick. This could lead to a positive open on Wednesday morning. Both June Hogs and August Feeder Cattle closed gaps that were formed by earlier price action. Slaughter levels remain depressed for both Cattle and Hogs with Friday, and Monday slaughter levels revised lower for both days. Slaughter for Tuesday is estimated to be 84,000 for cattle and 354,000 for Hogs. Last year’s levels were 121,000 and 478,000 respectively for this week. Right now, we are slaughtering 6 days a week. A few weeks ago, I saw an article that mention Sunday slaughter. With the goal of making meat available to consumers for purchase in grocery stores and that is curtailed by shut-downs and safety slow-downs, why aren’t packers making an effort to add Sunday slaughter to the mix? Just wondering…. Boxed beef cutout values soared with choice up 11.47 to 259.85 and select up 10.83 to 248.82. The choice/ select spread widened to 11.03 and the load count was 78. The Feeder Cattle index was higher and is at 119.63 as of April 20,2020. The Lean Hog Index dipped and is at 44.55 as of April 17, 2020. The Pork Cutout Index jumped higher and is at 57.11 as of 4/20/2020.
Trade Suggestion(s)
Risk/Reward
Futures N/A
Options N/A
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, April 23,2020 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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