Walsh Trading Daily Insights
Commentary
October Lean Hogs rallied past resistance at the declining 100 DMA (53.05) to the session high at 53.90. This just above resistance at 53.825 but below the recent high made at 54.15. It settled just under resistance at 53.525. Hogs are trying to get better footing and need to stay above the 100 DMA in my opinion. A pullback from the 100.DMA could see price revisit support at 50.475. A breakout above the 54.15 high could see price test resistance at 55.625. Hogs are still in a downtrend and face resistance at 53.825, 54.775, 55.625 and then 56.10. Support is at the 100 DMA, 51.80, 50.475 and then 49.35. Cutouts and the Lean Hog Index remain firm after making their lows last month.
The Pork Cutout Index was higher and is at 72.17 as of 8/14/2020. The Lean Hog Index rose and is at 53.84 as of 8/13/2020.
Estimated Slaughter for Monday is 480,000 which is above last week’s 457,000 and last year’s slaughter at 478,000.
September Feeder Cattle broke down on Monday, trading past support at 144.25 making the low at 144.10. It settled nearby at 144.40. A breakdown below settlement could see price test support at 142.40 and then 140.775. If settlement holds price could consolidate within the Monday range. Resistance is at 145.05, 146.10, 147.30 and then 148.40. Feeder Cattle is in an uptrend, in my opinion. Support is at 143.50, 142.40 and then 140.775. The Feeder Cattle Index dipped and is at 142.20 as of 8/14/2020.
October Live Cattle traded to a new high for the up move at 111.15. This is just above resistance at 110.80. Price couldn’t be sustained up here and dropped. It traded down to the low at 109.60 and settlement was nearby at 109.875. The low was right at support at 109.60. If price breaks down below support a pullback to support at 108.65 is possible. If settlement holds, a retest of resistance at 110.80 is possible. A breakout above the high could see price move towards resistance at 112.35. Resistance then comes in at 113.90. Support is at 109.60, 108.65, the 200 DMA (107.48), 107.30 and then 106.025.
Boxed beef cutouts were higher with choice cutouts up 3.02 to 217.26 and select up 2.01 to 201.94. The choice/ select spread widened to 15.32 and the load count was 133.
Monday’s estimated slaughter is 117,000, above last week’s 113,000 and last year’s 115,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been at a standstill in the Southern and Northern Plains. In the Western Cornbelt negotiated cash trading has been inactive with very light demand. Not enough purchases for a market trend. Last week in the Southern Plains live purchases moved mostly at 104.00. For the prior week in the Northern Plains live purchases moved from 106.00 to 106.50 and dressed purchases, in Nebraska, moved from 168.00 to 170.00. For the previous week in the Western Cornbelt live purchases moved from 105.00 to 107.00 and dressed purchases moved from 165.00 to 170.00.
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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