Walsh Trading Daily Insights
June Hogs made a few attempts to rally on Friday, but ultimately settled in negative territory at 57.875. It was able to recover from Thursday’s new low as it formed an inside candlestick and settled above the 50 DMA (57.76). Slaughter levels have recovered and are well above last week’s low numbers. It has a long way to go, however to catch up to last year’s numbers. Friday’s slaughter is estimated to be 375,000. This is above last week’s 335,000, but below last year’s 448,000. Saturday slaughter is estimated at 250,000, above last week’s 226,000 and well above last year’s 71,000. The higher Saturday slaughter narrowed the weekly deficit from last year to 249,000 head. Slaughter for the week is estimated at 2,103,000, last week saw an estimated 1,775,000 and last year was 2,352,000. The Pork Cutout Index dipped and is at 116.38 as of 5/14/2020. The Lean Hog Index jumped and is at 68.87 as of 5/13/2020. August Feeder Cattle also attempted to recover from Thursday’s breakdown to a new low. It tried to rally above the Thursday high but failed and settled in the lower end of the Friday trading range at 131.075, also forming an inside candlestick. Feeder’s, however settled below the 100 DMA (131.80) for the second day in a row. The Feeder Cattle Index jumped and is at 124.80 as of 5/14/2020. I will stick with June Live Cattle today as volume was above the August contract. June reversed Thursday’s breakdown to the lower end of its seven-day trading range. It went limit up several times for extended periods but it did not settle limit up on the day. It settled at 97.00, up 2.875 for the day and the last 5 minutes of trade after settlement saw price go limit up once again. Cattle, however will have the normal limit of 3 handles on Monday. Boxed beef cutouts prices look like they have peaked, in my opinion. Choice and select cutouts crashed, with choice dropping 16.60 to 434.32 and select collapsing 18.34 to 419.06. The choice/ select spread widened to 15.26 and the load count was 125. Slaughter levels continue to improve with Friday’s estimated slaughter at 91,000, above last week’s 85,000. It is still far below last year’s 119,000. Saturday slaughter is estimated to be 50,000, above last week’s 44,000, but below last year’s 58,000. The weekly estimate is at 499,000, above last week’s 452,000, but below last year’s 662,000. Cash traded in the Southern Plains with a few live cash trades at 120.00. Nebraska saw a few live trades from 119.00 to 120.00 and a few dressed trades at 190.00. The Western Cornbelt didn’t have enough trades to report, according to the USDA report. The Friday range saw live cash trades from 100.00 to 120.00 and dressed trades from 182.00 to 190.00.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, May 21, 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.
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Senior Market Strategist
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