August Lean Hogs opened higher, rallied to close the gap created from the June 19th 52.70 low and the yesterday’s 52.45 high making the high at 53.025 and then dipping to settle at 52.50. It looked like some short-covering to me after making another new low for the down move on Monday for the August contract. The gap closure and pullback make tomorrow’s session interesting. Do we give back the Tuesday rally or do we see more short covering? Support for August Lean Hogs on Wednesday is at 51.80, 50.475 and then 49.35. Resistance is at 53.825, 54.775 and then 55.625. The Pork Cutout Index and the Lean Hog Index continued their decline. The Pork Cutout Index dipped and is at 64.83 as of June 22, 2020. The Lean Hog Index decreased and is at 45.06 as of June 19, 2020. Estimated Slaughter for Tuesday is at 468,000, this is above last week’s slaughter of 458,000 and below last year’s slaughter at 473,000. August Feeder Cattle had a strong rally after a lower open, trading up to 135.375. This is just below the 200 DMA (135.77) on the continuous chart. Resistance was too strong and the market pulled back settling in the middle of the trading range at 133.20. Wednesday has support at 132.075, 131.10 and then 129.65. Resistance is at 133.50, 134.25, 135.60 and then 136.75. The Feeder Cattle Index decreased and is at 128.72 as of 6/22/2020. August Live Cattle opened higher and traded to the session low at 94.75. Price surged from the low eventually going limit up on the day for a brief time. The high was at 98.125. It pulled back from the high and settled at 97.20. Support is at 96.10, 94.30 and then 92.15. Resistance is at the declining 100 DMA on the continuous chart at 98.34, 99.375 and then 100.275. Boxed beef cutouts declined with choice cutouts down 2.25 to 211.81 and select dipped 0.73 to 203.57. The choice/ select spread narrowed to 8.24 and the load count was 205. Tuesday’s estimated slaughter is 120,000, above last week’s 119,000, and below last year’s 123,000. The USDA report LM_Ct131 states: Thus far for Tuesday in Nebraska negotiated cash trading has been slow on light demand. Compared to last week the bulk of dressed trades have moved 3.00 to 7.00 lower at 155.00. Not enough live trades for a market trend. Last week live trades moved from 98.00 to 102.00. So far Tuesday in Kansas and Western Cornbelt negotiated cash trading has been limited on light demand. In the Western Cornbelt a few dressed trades moved at 155.00. However, not enough trades in these regions for a market trend. Thus far for Tuesday in the Texas Panhandle negotiated cash trading has been at a standstill. Last week in the Texas Panhandle live trades moved from 98.00 to 102.00. Last week in Kansas live trades moved mostly at 102.00. For the previous week in the Western Cornbelt live trades moved from 99.00 to 102.00 and dressed trades moved mostly from 160.00 to 162.00.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays (except holiday weeks’) and our next webinar will be on Thursday, June 25, 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.**
Senior Market Strategist
Walsh Trading, Inc.
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (WTI) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.