Walsh Trading Daily Insights
Commentary
Despite the slaughter problems facing the cattle and hog markets futures prices moved higher on Monday, with Hog futures settling limit up in its June, July and August contracts. Slaughter levels continue to collapse with cattle slaughter at 81,000 and hog slaughter at 318,000 for Monday, April 27, 2020. This is creating growing supply of market ready livestock that can’t be processed for consumption. Shortages of meat could be the result in retail outlets if this continues. I think the food service industry shutdown is helping keep supply in decent shape for retail outlets, with various states starting to open and get back some normalcy for citizens, problems could surface rapidly in grocery stores. The limited restaurant openings saw brisk business as consumers were exited to get out of the house and eat out, even with long wait times to get in. The openings are probably creating hope that slaughter houses will reopen sooner rather than later and get product moving through the system. This is despite more announcements of plant shut-downs. Hogs will have expanded limits of 5.5 handles for trade on Tuesday. Negotiated cash trading took place on a limited basis at 100.00 on Monday. Boxed beef cutout values continued its blistering record pace with choice cutouts up a whopping 18.47 to a new record at 311.84 and select up 19.76 to 298,78. The choice/ select spread narrowed to 13.06 and the load count was 96. The Feeder Cattle Index inched higher at 119.72 as of April 24, 2020. The Lean Hog Index jumped to 47.72 as of April 23,2020. The Pork Cutout Index surged to 72.32 as of April 24,2020. USMCA takes effect on July 1st.
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 30, 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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