Livestock Report

Ben DiCostanzo General Commentary Leave a Comment

                                                                                   Walsh Trading Daily Insights

Commentary

February Lean Hogs opened lower traded down to the session low at 67.725. It consolidated near the low the remainder of the session and settled at 67.875. The session’s trade was lackluster and it spent the session at the 67.80 support level, never straying too far above it or below it since the open. Maybe traders were waiting for the export sales report on Thursday before moving price. If price can hold settlement, we could see a test of resistance at 68.75 and then 69.80. A breakout above 69.80 could see resistance tested at70.90. A breakdown below 67.80 could see support tested at 66.55 and then 64.80.

The Pork Cutout Index dipped and is at 78.33 as of 12/1/2020.

The Lean Hog Index dipped and is at 66.67 as of 11/30/2020.

Estimated Slaughter for Wednesday is 497,000 which is above last week’s 494,000 and even with last year. The weekly estimate (so far) is 1,482,000, which is below last week’s 1,488,000 and last year’s 1,489,000.

January Feeder Cattle made an effort to break down this morning, trading past support at 140.775 to the low at 140.35. Buyers came back in the market and price rallied to the session high at 142.15. It settled nearby at 141.80. It also traded in a lackluster fashion as traders see corn strength and demand for feeders in the cash market. So up and down, up and down we go. Support remains at 140.775 and then the 100 DMA at 139.61. A piercing of the 100 DMA could see price test support at 138.95. Resistance is at 142.40. Trading past here could see a retest of the Tuesday high at 143.475. Resistance then comes in at 144.25 and 145.05.

The Feeder Cattle Index declined and is at 139.87 as of 12/1/2020.

February Live Cattle punched through support at 112.35 to the low at 112.20. It didn’t stay there long and it rallied to resistance at 113.90, making the high just above it at 113.975. It settled at 113.925. The consolidation continues. Cattle has formed a ledge with the high at 114.70 and the low at 112.20. A breakout above the high could see resistance tested at 116.55. Resistance then comes in at 117.80. A break down below the low could see support tested at 110.80. Support then comes in at 109.60.

Boxed beef cutouts were mixed with choice cutouts down 0.28 to 243.40 and select up 0.65 to 223.08. The choice/ select spread narrowed to 20.32 and the load count was 130.

Wednesday’s estimated slaughter is 120,000, which is above last week’s 118,000 and last year’s 117,000. The weekly estimate (so far) is 361,000, which is above last week’s 360,000 and last year’s 358,000.

The USDA report LM_Ct131 states: Thus far for Wednesday negotiated cash trading in Texas has been moderate on light to moderate demand with live purchases unevenly steady compared to last week from 110.00-112.00. In Kansas negotiated cash trading has been limited on light demand with a few early live purchases at 110.00, however not enough for a full market trend. Last week in Kansas live purchases traded at 111.00. In Nebraska, negotiated cash trading and demand has been light to moderate with live purchases steady to 1.00 lower than last week at 110.00 and a few early dressed purchases from 172.00- 174.00, however not enough dressed purchases for a full market trend. Last week in Nebraska, dressed purchases traded from 172.00-174.00. In the Western Cornbelt negotiated cash trading was light on moderate demand with a few live purchases at 110.00, however not enough for a full market trend, and a few early dressed purchases steady to 2.00 lower compared to last week at 172.00. The last reported live market in the Western Cornbelt was Tuesday from 109.00-110.00.

The USDA is reporting live trades from 106.00 – 112.00 and dressed from 170.00 – 174.00 (so far this week).

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

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

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