Walsh Trading Daily Insights
Commentary
July Lean Hogs opened at the session lows, rallied to the session high and then pulled back to settle near unchanged from Friday’s settlement. The high at 55.00 was just above the 54.775 resistance level and the low at 53.20 was just below support at 53.20. It was a quiet session as price is consolidating at the lows of the current down move, in my opinion. Support on Tuesday is at 53.825, 51.80 and then 50.475. Resistance is at 54.775, 55.625, and then 56.10. Estimated Slaughter for Monday is at 445,000, this is above last week’s slaughter of 408,000 and below last year’s slaughter at 470,000. The Pork Cutout Index fell and is at 75.26 as of 6/5/2020. The Lean Hog Index dropped and is at 53.35 as of 6/4/2020. August Feeder Cattle opened at the highs and grinded lower the rest of the session, making the low at the end of the session. The high (134.325) was just above resistance at 134.25 and the low (132.675) was just above the June 1st low at 132.525. It is trading in the lower end of its 136.725 to 132.525 trading range. Support is at 132.075, 131.10 and then 129.65. Resistance is at 133.50, 134.25 and then 135.60. The Feeder Cattle Index increased and is at 129.07 as of 6/5/2020. In a lackluster, quiet session August Live Cattle traded in a narrow trading range on Monday as it consolidated within Friday’s trading range. It is also in the lower part of its trading range from 101.30 to 95.70. Settlement was at 96.325. Support is at 96.10, 94.30 and then 92.15. Resistance is at 97.075, 99.375 and then 100.275. Boxed beef cutouts continued its descent from record levels. Choice cutouts declined 6.90 to 254.58 and select fell 15.30 to 231.12. The choice/ select spread widened to 23.46 and the load count was 223. Slaughter levels are rising and approaching last year’s levels. Monday’s estimated slaughter is 117,000, above last week’s 110,000, and below last year’s 119,000. It is starting to look like Saturday’s slaughter levels will decide where we are in relation to last year’s levels. The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been at a standstill in the Southern Plains and Western Cornbelt. In Nebraska negotiated cash trading has been inactive on very light demand. Not enough trades for a market trend. Last week in the Southern Plains the bulk of live trades ranged from 105.00-117.00. For the prior week in Nebraska the bulk of live and dressed trades moved from 110.00-118.00 and 175.00-185.00, respectively. For the previous week in the Western Cornbelt live trades moved from 108.00-114.00 and the bulk of dressed trades moved from 175.00-185.00.
Trade Suggestion(s)
Risk/Reward
Futures N/A
Options N/A
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Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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