Walsh Trading Daily Insights
Commentary
June Lean Hogs opened higher, rallied past resistance at 100.075 and then broke down to the session low at 99.20. It reversed course and rallied the rest of the day, making the high at 101.375. It settled nearby at 101.25. Cash and cutout prices remain strong and futures prices are responding accordingly. If price can continue higher, a test of resistance at 101.975 is possible. The Thursday high at 102.50 is nearby. Resistance then comes in at 104.35. A failure from 100.075 could see support at 98.475 tested. Support then comes in at 97.30.
The Pork Cutout Index increased and is at 102.74 as of 3/22/2021.
The Lean Hog Index increased and is at 92.71 as of 3/22/2021.
Estimated Slaughter for Tuesday is 476,000 which is below last week’s 493,000 and last year’s 499,000. Monday slaughter was revised lower to 481,000. The weekly estimated total (so far) is 957,000, which is below last week’s 975,000 and last year’s 998,000.
May Feeder Cattle tested support at 144.25 early in the trading session, making the low at 144.20. Support held and the market reversed course, rallying the rest of the session and making the high at the end of the day at 145.80. It settled at 145.475. Settlement was above the key level at 145.05. If price can break out above settlement, we could see a test of resistance at 146.20. Resistance then comes in at 147.30. A failure from 145.05, could see price re-test support at 144.25. Support then comes in at 143.50.
The Feeder Cattle Index increased and is at 134.64 as of 3/22/2021.
June Live Cattle rallied on Tuesday, trading to the high at 120.175 which puts price in the middle of its 122.70 – 118.10 trading range. Settlement was at 120.05. If price can trade above the Tuesday high a test of resistance at 120.80 is possible. The rising 50 DMA is also at 120.80, so, in my opinion this should be strong resistance. If price can take out this level, a test of resistance at 121.90 is possible. Then comes the 122.70 trading range high. A failure from settlement could see support tested at 119.375. Support then comes in at 117.80.
Boxed beef cutouts increased as choice cutouts surged 3.04 to 233.99 and select jumped 2.18 to 225.23. The choice/ select spread widened to 8.76 and the load count was 143.
Tuesday’s estimated slaughter is 117,000, which is below last week’s 121,000 and last year’s 125,000. The weekly estimated total (so far) is 233,000, which is above last week’s 228,000 and below last year’s 242,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading has been mostly inactive on very light demand in the Western Cornbelt and at a standstill in all other major feeding regions. Not enough purchases in any region for a full market trend. Last week in the Southern and Northern Plains live purchases traded at 114.00. In Nebraska dressed purchases traded from 180.00-182.00. For the prior week in the Western Cornbelt live purchases traded from 114.00-115.00 and dressed purchases traded from 180.00-182.00.
The range for the week (so far) is 114.00 for live cattle and nothing 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 25, 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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