Walsh Trading Daily Insights
Commentary
June Hogs has grinded lower the past three days and is near the Thursday low (56.175). Tuesday’s trade took price to a low at 56.55 and a nearby settlement at 56.65. Support is at the Thursday low and then 54.775. Resistance is at 57.025 and then 58.25. Slaughter levels continue to recover and are well above last week’s numbers. It still has a long way to go, however to catch up to last year’s numbers. Tuesday’s slaughter is estimated to be 397,000. This is above last week’s 361,000, but below last year’s 466,000. The Pork Cutout Index continues its fall from last week’s peak and is at 112.18 as of 5/18/2020. The Lean Hog Index has also fallen from its high and is at 67.60 as of 5/15/2020. August Feeder Cattle consolidated within Monday’s trading range forming an inside candlestick. It settled at 131.925. Support is at 131.10, 129.65 and 128.875. Resistance is at 132.075, 133.50 and 134.25. The Feeder Cattle Index jumped and is at 126.84 as of 5/19/2020. June Live Cattle also consolidated within Monday’s trading range. It settled at 98.775. Support is at 97.075 and 96.10. Resistance is at 99.375, 100.275 and 101.625. Boxed beef cutouts continued its decline from its record levels although they remain at extreme levels. Choice cutouts fell 5.48 to 409.47 and select dropped 6.00 to 388.87. The choice/ select spread widened to 20.60 and the load count was 120. Slaughter levels are climbing and Tuesday’s estimated slaughter is 99,000, above last week’s 89,000. It is still far below last year’s 121,000. The USDA report LM_Ct131 states: Thus far Tuesday negotiated cash trade was light on moderate demand in Nebraska and the Western Cornbelt. In Nebraska a few early live purchases traded from 115.00-120.00 with a few dressed purchases from 180.00-190.00, however not enough for an adequate market test. In the Western Cornbelt a few early dressed purchases traded from 178.00-190.00, however not enough for an adequate market test. Trade was inactive on light demand in the Southern Plains. The latest established market in any feeding region was on Monday with dressed purchases in the Western Cornbelt from 180.00-190.00, bulk at 180.00. Last week live purchases traded from 105.00-115.00. The latest established market in the Southern Plains was last week with live purchases from 110.00- 120.00. Last week in Nebraska the bulk of purchases traded mostly at 110.00 and 180.00.
Trade Suggestion(s)
Risk/Reward
Futures N/A
Options N/A
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
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