Walsh Trading Daily Insights
Commentary
April Lean Hogs opened lower, made the session high at 87.075 and then declined the remainder of the session, making the low at 85.125. It settled nearby at 85.35. The sell-off nearly took Hogs down limit and the bearish evening star candlestick pattern was in charge. The break down slid past support at 85.375 and settlement was just below support. A break down from the low could see support tested at the rising 21 DMA now at 83.66 and then 83.325. If Hogs can hold settlement, consolidation within the Tuesday range is possible. Tuesday’s high is just below resistance at 87.10.
The Pork Cutout Index ticked higher and is at 93.11 as of 3/01/2021.
The Lean Hog Index jumped and is at 81.90 as of 2/24/2021.
Estimated Slaughter for Tuesday is 497,000 which is even with last week and last year. The weekly total (so far) is estimated to be 990,000, which is above last week’s 986,000 and last year’s 988,000.
April Feeder Cattle opened lower at 140.65, collapsed to support at 138.95 making the low just below it at 138.875 and then rallied the remainder of the session. The rally was strong, taking out the early high and making the new session high at 140.775 and then settling nearby at 140.475. The high is right at the key level at 140.775. If price can trade past 140.775, we could see resistance re-tested at 142.40. Resistance then comes in at 143.50. A failure from settlement could see price re-test support at 138.95.
The Feeder Cattle Index declined and is at 137.54 as of 3/01/2021.
April Live Cattle opened unchanged and then traded to the session low at 118.575. It recovered and traded to the session high at 120.00. It settled at 119.425. The break down in cattle took price to a new low for the down move and it traded below the 50 DMA (119.25) for the second day in a row but was able to settle above it. If price can hold above the 50 DMA, a test of resistance at 120.80 is possible. If futures can overtake this level, a move toward resistance at 121.90 is possible. Resistance then comes in at 122.825. A failure from the 50 DMA could see support tested at 117.80.
Boxed beef cutouts fell as choice cutouts dropped 4.35 to 234.68 and select declined 1.47 to 226.17. The choice/ select spread narrowed to 8.51 and the load count was 112.
Tuesday’s estimated slaughter is 123,000, which is above last week’s 122,000 and below last year’s 124,000. The total for the week (so far) is estimated to be 243,000, which is above last week’s 241,000 and below last year’s 247,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading has been at a standstill in all feeding regions. For the prior week live purchases traded at 114.00 in the Southern Plains, Nebraska and Western Cornbelt. For the previous week in Nebraska and Western Cornbelt dressed purchases traded at 182.00.
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 Friday, March 5, 2021 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.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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