Livestock Report

Ben DiCostanzo General Commentary Leave a Comment

                                                                           Walsh Trading Daily Insights

                                                                                        Commentary

    October Lean Hogs broke down early in the trading session making its low at 49.425 which is just above support at 49.35. It bounced off the low and settled at 50.15. Fears China will pullback from pork purchases as tensions increase with the US is keeping a lid on the futures, in my opinion. Hogs are in a downtrend and face resistance at 50.475, 51.80, 51.875 (down sloping trendline) and then 53.825 on Monday. Support is at 49.35, 47.825 and then 46.30. The Pork Cutout Index increased and is at 70.28 as of July 23, 2020. The Lean Hog Index was higher and is at 49.69 as of July 22, 2020. Estimated Slaughter for Friday is at 472,000. This is higher than last week’s slaughter of 462,000 and last year’s slaughter at 457,000. Saturday’s estimated slaughter is expected to be 231,000, higher than last week’s 195,000 and last year’s 12,000. The weekly estimated total is at 2,589,00, above last week’s 2,518,000 and last year’s 2,349,000.

   September Feeder Cattle broke down to support at 142.40, making the low just above it at 142.45. Settlement was at 142.75. Feeder Cattle is in an uptrend, in my opinion. Resistance is at 143.50, 144.25 and then 145.05. Support is at 142.40, 140.775, 138.95, 136.75 and then 134.25. The Feeder Cattle Index hasn’t updated yet and as of 7/22/2020 is at 137.96. This is a nice increase from the previous day.

    October Live Cattle consolidated within Thursday’s range, forming an inside candlestick. The low was at 104.425, which is just above support at 104.20. Settlement is at 105.10. Resistance is at 106.025, 107.30, the 200 DMA (108.01), 108.65 and then 109.60. Support is at 104.85 -104.20 and then 103.00.

    Boxed beef cutouts were lower with choice cutouts down 0.49 to 201.77 and select down 0.16 to 190.63. The choice/ select spread narrowed to 11.14 and the load count was 117.

    Friday’s estimated slaughter is 113,000, down from last week’s 115,000 and last year’s slaughter of 119,000. Saturday’s estimated slaughter is expected to total 61,000, below last week’s 65,000 and above last year’s 53,000. The weekly total is expected to be 646,000, below last week’s 650,000 and last year’s 652,000.

    The USDA report LM_Ct131 states: Thus far for Friday negotiated cash trading has been inactive on very light demand in Nebraska and Western Cornbelt. In the Southern Plains and Colorado negotiated cash trading has been at a standstill. Not enough purchases for a market trend in any feeding region. In the Southern Plains the last reported market was on Wednesday with live purchases at 96.00. In Nebraska the last reported market was on Thursday with live and dressed purchases at 98.00 and 158.00, respectively. In the Western Cornbelt Wednesday was the last reported market with live and dressed purchases from 99.00 to 100.00 and 158.00, respectively. In Colorado the last reported market was on Wednesday with live purchases at 98.00.

                                                                       The Cattle on Feed Report:

                                                                Cattle Inventory: (From USDA):

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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bdicostanzo@walshtrading.com

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