Walsh Trading Daily Insights
Commentary
April Lean Hogs opened lower, worked its way to the session low at 87.85 and then rallied the rest of the session to the high at 88.925. It settled at 88.775. Settlement was above resistance at 88.325. If price can hold settlement, a test of trendline resistance at 89.70 is possible. Resistance then comes in at 90.40. A failure from 88.325 could see support at 87.10 tested. Exports are due on Thursday morning. ASF continues to cause problems in China and the rest of Asia. It is not going away anytime soon, in my opinion. Demand for US pork should remain strong.
The Pork Cutout Index increased and is at 94.57 as of 3/09/2021.
The Lean Hog Index increased and is at 86.08 as of 3/08/2021.
Estimated Slaughter for Wednesday is 492,000 which is below last week’s 497,000 and above last year’s 487,000. The estimated slaughter for the week (so far) is 1,465,000, which is below last week’s 1,487,000 and last year’s 1,473,000. Tuesday’s slaughter was revised lower to 484,000.
April Feeder Cattle opened lower, traded to the session high at 142.55 and then grinded lower to the session low at 141.325. It traded sideways the rest of the day and settled at 141.725. The high was just above resistance at 142.40. Resistance held again and Feeders drifted. Even weaker corn couldn’t propel price past resistance. It settled below resistance. 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 lower and is at 133.99 as of 3/09/2021.
April Live Cattle opened lower, made the session high at 119.575 and grinded lower in another tight range. It made the low at 118.675 and settled nearby at 118.775. It is consolidating, with the range high at 120.125 and the low at 118.50. It is struggling at the rising 50 DMA (119.81) and the key level at 119.375. It couldn’t even challenge the 50 DMA as traders remain wary of cash’s inability to move higher. Packers control a lot of cattle and have been able to keep cash in a tight range. 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.
Boxed beef cutouts were lower as choice cutouts dropped 1.74 to 227.29 and select fell 3.98 to 219.82. The choice/ select spread widened to 7.47 and the load count was 132.
Wednesday’s estimated slaughter is 121,000, which is even with last week below last year’s 125,000. The estimated weekly total (so far) is 363,000, which is below last week’s 364,000 and last year’s 372,000.
The USDA report LM_Ct131 states: Thus far for Wednesday negotiated cash trading has been limited on light demand in the Texas Panhandle and light on light to moderate demand in Kansas with live purchases steady at 114.00 compared to the last reported market on Tuesday. Negotiated cash trading in Nebraska has been light on light to moderate demand with live purchases steady to 1.00 lower from 113.00-114.00 compared to the last reported market on Tuesday and dressed purchases mostly steady with last week at 180.00. In Colorado negotiated cash trading was slow on light demand with live purchases steady compared to the last reported market on Tuesday at 114.00. In the Western Cornbelt negotiated cash trading was limited on light demand, not enough purchases for a full market trend. 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 110.00 – 114.00 and 177.00 – 180.00 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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