Livestock Report

Ben DiCostanzo General Commentary Leave a Comment

 Commentary

    August Lean Hogs made a new low for the down move at 47.525, recovered and rallied to the session high at 49.125, then settled in the middle of the trading range at 48.45. It formed an outside candlestick as the range was wider than Friday’s range. There is a gap however from Thursday’s low at 50.60 to Friday’s high at 48.95. Hogs are in a downtrend in my opinion and the gap could be strong resistance. Support on Tuesday is at 47.775, 46.30 and then 43.05. Resistance is at 49.35, 50.475 and then 51.80. The Pork Cutout Index increased and is at 65.21 as of June 26, 2020. The Lean Hog Index recovered off its low and is at 45.23 as of June 25, 2020. Estimated Slaughter for Monday is at 468,000. This is above last week’s slaughter of 449,000 and above last year’s slaughter at 456,000.

 August Feeder Cattle took a knockdown punch mid-morning, trading down past the 131.10 support level and last Tuesday’s low (131.025) to the session low at 130.45. It rose from the canvas and fought its way to the session high at 133.90. It settled nearby at the key level at 133.50. The battle continues with settlement in the middle of its 138.80 – 128.325 trading range. Monday has support at 132.075, 131.10 and then 129.65. Resistance is at 134.25, 135.60 and then 136.75. The Feeder Cattle Index increased and is at 130.04 as of 6/25/2020.

   August Live Cattle continued its consolidation within last Tuesday’s trading range. The Tuesday high was 98.125 and its low was 94.75. Price has come back to the middle of the Tuesday range with the low settlement at 96.475. The low volume trade persists and the price ranges have tightened considerably. Support is at 96.10, 94.30, the rising 50 DMA at 94.19, trendline support at 93.425 and then 92.15. Resistance is at the declining 100 DMA on the continuous chart at 97.39, 98.125, 99.375 and then 100.275. Boxed beef cutouts stabilized on Monday with choice cutouts up 1.19 to 208.36 and select up 1.86 to 200.71. The choice/ select spread narrowed to 7.65 and the load count was 150. Monday’s estimated slaughter is 121,000, above last week’s and last year’s slaughter of 119,000. This is a shortened kill week due to the July 4th holiday on Saturday. The USDA report LM_Ct131 states: Thus far Monday trade was light on light to moderate demand in the Western Cornbelt. Compared to last week, early dressed purchases traded steady to 3.00 lower mostly at 153.00. A few early live purchases traded from 95.00-97.00, however not enough for an adequate market test. The latest established live market in the Western Cornbelt was last week with purchases mostly from 97.00- 98.00. Trade was mostly inactive on light demand in the Southern and Northern Plains. The latest established market in the Texas Panhandle was last week with live purchases from 93.00-95.00, few up to 97.00. Last week in Kansas live purchases trade from 95.00-97.00, bulk at 97.00. In Nebraska last week, live purchases traded from 95.00-98.00, bulk at 95.00. Dressed purchases last week traded from 155.00-156.00.

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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