Livestock Report

Ben DiCostanzoGeneral Commentary

Walsh Trading Daily Insights


June Lean Hogs continued to rocket higher, gap opening higher and trading past resistance at 66.55 to a new high for the up-move. The high was 66.95 and it pulled back to settle at 65.50. This closed the gap from the March 30th high at 63.25 and the March 29 low at 64.25. It settled above the gap and above longer-term resistance on the continuous chart at the 100 DMA at 63.275 and the 200 DMA at 65.36. Hogs had expanded limits on Monday. An expanded limit move would have taken price to 68.20. However, the rally stalled below resistance at yet another gap from the March 26th low at 68.75 and the March 27th high at 67.55. Support is at the gap created by Monday’s low at 63.075 and Friday’s high at 62.70. Slaughter levels remain low but are improving. Smithfield Foods Inc. is reopened its hog-processing plant in Sioux Falls, South Dakota on Monday that had been closed since April 12. It will be at reduced capacity but it is a move in the right direction. Hopefully, the testing procedures and safety precautions keep the workers healthy and safe. Friday’s slaughter was revised down to 273,000 from 280,000. Monday’s slaughter is estimated at 292,000. The Pork Cutout Index continues to surge and is at 93.89 as of 5/01/2020. The Lean Hog Index is also rising and it jumped to 54.70 as of 4/29/2020. The June Live Cattle contract rallied early in the trading session, breaching the upper part of the 89.25 -80.275 trading range and making a new high at 89.89.725. It didn’t last however, falling back and settling in the lower end of its trading range at 88.075. The pullback keeps cattle ranging, even though it is nice we saw the top of the range pierced. I want it to settle above that previous high (89.25). I feel that would energize cattle and accelerate any move higher.  Feeders continue to consolidate. Estimated slaughter on Monday was estimated at 75,000. Boxed Beef Cutouts continued its record climb, as choice cutouts soared 32.60 to 410.05 and select rose 19.53 to 376.66. The choice/ select spread jumped to 33.39 and the load count was 121. The Feeder Cattle Index decreased and is at 118.91 as of 5/01/2020.

Trade Suggestion(s)


Futures N/A

Options N/A

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

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