Walsh Trading Daily Insights
Commentary
June Lean Hogs opened higher, rallied to the session high and a new high for the up-move at 107.40. Hogs couldn’t handle success and fell back, trading down to the low of the day at 105.05. It settled nearby at 105.60. The high was between resistance at 106.85 and 107.925. The low was just above the rising 8 DMA at 104.81. It formed a bearish engulfing pattern at a new high. This could potentially lead to a pullback if support levels are penetrated. If price can stay above settlement, a re-test of resistance at 106.85 is possible. Resistance then comes in at 107.925. A failure from settlement could see support challenged at the rising 8 DMA and then 104.35. There is gap support from the March 25th high at 103.55 to the March 29 low at 103.725. Support then comes in at 101.975.
The Pork Cutout Index increased and is at 108.29 as of 4/02/2021.
The Lean Hog Index increased and is at 99.38 as of 4/01/2021.
Estimated Slaughter for Monday is 331,000 which is below last week’s 483,000 and last year’s 475,000.
May Feeder Cattle opened higher which also was the session low (149.60) rallying to the session high at 152.30. The high was right at 152.30 resistance and price then consolidated and settled nearby at 151.775. Settlement was above the key level at 151.55. If price can hold settlement, and then break out above 152.30, we could see a re-test of resistance at 153.50. Resistance then comes in at 154.25. A failure from settlement, could see price test support at 149.975.
The Feeder Cattle Index decreased and is at 139.80 as of 4/02/2021.
June Live Cattle opened strong at the session low (123.125) raced higher and then continued higher the rest of the day to 124.775 for the high. It settled nearby at 124.425. This a is a new high for the recent up-move. It also settled above the 124.30 resistance level putting the February 16 high on the continuous chart at 126.70 in traders cross-hairs. Cash traded as high as 121.00 on Friday creating optimism in the market for continued higher prices going forward for fat cattle. If cattle can hold settlement, a test of resistance at 125.80 is possible. Resistance then comes in at 126.625 and then the February 16 high. A failure from 124.30 could see price test support at 122.825.
Boxed beef cutouts surged as choice cutouts soared 5.82 to 258.67 and select jumped 2.89 to 249.86. The choice/ select spread widened to 8.81 and the load count was 105.
Monday’s estimated slaughter is 108,000, which is below last week’s 119,000 and above last year’s 107,000.
The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been at a standstill in all major feeding regions. Last week in the Southern Plains live purchases traded at 117.00. In Nebraska last week live and dressed purchases traded at 118.00 and 190.00 respectfully. In Colorado two weeks ago, live purchases traded at 116.00. Last week in the Western Cornbelt live and dressed purchases traded from 118.00-120.00 and 188.00-190.00 respectfully.
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, April 8, 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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