Walsh Trading Daily Insights
Commentary
December Lean Hogs opened higher and traded to the session high at 64.50. It couldn’t hold the gains and fell back and traded to the session low at 62.80. It bounced and settled at 63.525. Support is at 63.325, 61.80, 59.825. Resistance is at 64.80, 66.55 and then 67.80.
The Pork Cutout Index surged and is at 83.04 as of 9/17/2020. The Lean Hog Index jumped and is at 67.84 as of 9/16/2020.
Estimated Slaughter for Friday is 468,000 which is below last week’s 480,000 and above last year’s slaughter at 442,000. The weekly slaughter (so far) is estimated at 2,394,000, higher than last week’s (holiday week) 1,920,000 and below last year’s slaughter at 2,396,000. The estimated slaughter for Saturday is expected to be 193,000 which is below last week’s 403,000 and last year’s 205,000. The final estimates for the week are 2,587,000, last week 2,323,000 and for last year 2,601,000.
October Feeder Cattle attempted to rally on Friday reaching 143.15 for the session high. It couldn’t stay above the 50 DMA (142.70) and pulled back to settle at 142.425. This is a key area in my opinion as I also have a key level at 142.40. Feeders consolidated between the September 16 high at 144.00 and yesterday’s low at 140.575. There is resistance at the gap from 144.35 to 144.875. Resistance then comes in at 145.05 and 146.20. Support is at 140.775 and then 138.95. Cash is higher even with the fall run taking place.
The Feeder Cattle Index jumped and is at 142.18 as of 9/17/2020.
December Live Cattle continued to consolidate between support (110.80) and resistance (112.35). The range for the day was 112.525 high to 111.025 low. Settlement was at 111.85. Resistance held and drifted lower to 111.40. It settled in the middle of the range at 111.95. A failure from 110.80 could see support tested at 109.60 and then 108.65. A break out above the Friday high could see resistance tested at 113.90 and then 114.65.
Boxed beef cutouts were higher with choice cutouts up 0.59 to 215.64 and select up 0.55 to 203.94. The choice/ select spread widened to 11.70 and the load count was 147.
Friday’s estimated slaughter is 111,000, which is lower than last week’s 119,000 and last year’s 116,000. The weekly estimated slaughter (so far) is 590,000, higher than last week’s (holiday week) 479,000 and last year’s slaughter at 587,000. The estimated slaughter for Saturday is expected to be 55,000 which is below last week’s 95,000 and last year’s 73,000. The final estimates for the week are 645,000, last week 574,000 and for last year 661,000.
The USDA report LM_Ct131 states: Thus far for Friday in Nebraska negotiated cash trade was slow on light demand. Compared to the last reported market on Thursday dressed purchases moved 2.00 higher at 165.00. Not enough live purchases for a market trend. Thursday was the last reported live purchase market with purchases at 103.50. So far for Friday in the Southern Plains and Western Cornbelt negotiated cash trade has been inactive on light demand. Not enough purchases in these regions for a market trend. Wednesday was last reported market in the Southern Plains. In the Texas Panhandle live purchases moved from 103.00-103.50. In Kansas live purchases moved at 103.00. Thursday was the last reported market in the Western Cornbelt. Live purchases moved from 104.00-105.00 and dressed purchases at 163.00.
Trade Suggestion(s)
Risk/Reward
Futures N/A
Options N/A
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, September 24, 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.**
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
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