Walsh Trading Daily Insights
Commentary
April Lean Hogs opened lower, made the session low at 87.375 and then rallied to the session high at 88.85. It consolidated near the high the rest of the session and settled at 88.35. The rally took price past resistance at 88.325 with settlement above resistance. If price can hold settlement, a test of trendline resistance at 89.75 is possible. Resistance then comes in at 90.40. A failure from 88.325 could see support at 87.10 tested. Cash markets remain strong and the indices are reflecting that strength. This continues to provide fuel to the futures, in my opinion. Demand seems to be strong and should continue as stimulus checks get put in the hands of consumers, in my opinion.
The Pork Cutout Index increased and is at 94.02 as of 3/08/2021.
The Lean Hog Index increased and is at 85.32 as of 3/05/2021.
Estimated Slaughter for Tuesday is 492,000 which is below last week’s 497,000 and last year’s 496,000. The estimated slaughter for the week (so far) is 981,000, which is below last week’s 990,000 and last year’s 986,000.
April Feeder Cattle opened higher, traded to the session low at 139.65 and then rallied the rest of the day, trading to the session high at 142.40 at the end of the session. Settlement was nearby at 142.075. The high is right at resistance at 142.40. If price can break out above 142.40, we could see resistance re-tested at 143.50. Resistance then comes in at 144.25. A failure from settlement could see price re-test support at 140.775.
The Feeder Cattle Index ticked higher and is at 134.02 as of 3/08/2021.
April Live Cattle opened lower and traded in another tight range. It made the low at 118.975 and the high at 120.125. It settled at 119.65. It is consolidating, with the range high at 120.125 and the low at 118.50. It is struggling at the rising 50 DMA (119.73) and the key level at 119.375. If price can trade above the 50 DMA, a test of resistance at 120.80 is possible. A failure from settlement could see support tested at 117.80. Cash markets continue to stagnate, with cash trading Tuesday as 113.00 – 114.00. We need to see upswings in the cash markets. Even with cutouts in decline packers are making good change as cutouts are much higher now than last year at this time as demand for beef is strong.
Boxed beef cutouts were mixed as choice cutouts dropped 2.05 to 229.03 and select increased 0.67 to 223.80. The choice/ select spread narrowed to 5.23 and the load count was 158.
Tuesday’s estimated slaughter is 121,000, which is below last week’s 123,000 and last year’s 124,000. The estimated weekly total (so far) is 242,000, which is below last week’s 243,000 and last year’s 247,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading in Nebraska and Colorado has been slow on light demand with a few live purchases steady to 1.00 higher compared to last week at 114.00. Not enough dressed purchases for a full market trend. The last reported dressed market in Nebraska was last week at 180.00. Negotiated cash trading was mostly inactive on light demand in Texas and the Western Cornbelt and was at a standstill in Kansas, not enough purchases for a full market trend. Last week in the Southern Plains live purchases traded at 114.00. In the Western Cornbelt last week live purchases traded from 112.00-114.00 and dressed purchases traded at 180.00.
The USDA is reporting trades (so far) for live cattle at 113.00 – 114.00 and 177.00 for dressed cattle.
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, March 11, 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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