Walsh Trading Daily Insights
June Lean Hogs pressed higher on Wednesday, trading up to 107.775 and settling nearby at 107.70. The rally stopped short of resistance at 107.925 and is still well below the recent high at 110.075, which was reached on Monday. We get exports on Thursday morning before the open so this should key trade for Thursday. If price can push above resistance at 107.925, a test of resistance at 109.85 is possible. Resistance then comes in at the Monday high. A failure from settlement could see support tested at 106.85. Support then comes in at 104.90 (Tuesday low) and then 104.35. There is a gap from the March 25 high at 103.55 to the March 29 low at 103.725.
The Pork Cutout Index increased and is at 111.54 as of 4/13/2021.
The Lean Hog Index increased and is at 102.38 as of 4/12/2021.
Estimated Slaughter for Wednesday is 480,000 which is below last week’s 494,000 and above last year’s 435,000. Tuesday’s slaughter was revised higher to 484,000. The weekly estimated slaughter (so far) is 1,452,000, which is above last week’s 1,301,000 and last year’s 1,180,000.
May Feeder Cattle opened lower and broke down, trading below support at 145.05 to the session low at 144.625. Feeders were supported by the nearby rising 50 DMA at 144.35 and the 144.25 support level. Futures bounced and settled at 145.425. Rising corn futures set off the selling in my opinion along with a stagnant cash index. A failure from support at 145.05 could see price re-test support at the rising 50 DMA and then 144.25. Support then comes in at 143.50. If price can rally from settlement, we could see a re-test of resistance at 146.20. Resistance then comes in at 147.30.
June Live Cattle opened lower and tested support at the 119.275 level, making the low just above it at 119.575. The session high was at 121.475. It settled at 120.05. If cattle can hold settlement, a re-test of resistance at 120.80 is possible. Resistance then comes in at 122.825. A failure from settlement could see price re-test support at 119.375. Support then comes in at the rising 100 DMA, now at 118.40.
Boxed beef cutouts were higher as choice cutouts inclined 2.80 to 272.91 and select increased 0.77 to 267.31. The choice/ select spread widened to 5.60 and the load count was 108.
Tuesday’s estimated slaughter is 115,000, which is below last week’s 120,000 and above last year’s 90,000. The weekly estimated total (so far) is 343,000, which is below last week’s 345,000 and above last year’s 273,000.
The USDA report LM_Ct131 states: So far for Wednesday negotiated cash trading has been at a standstill in the Southern Plains, Colorado and Western Cornbelt. In Nebraska negotiated cash trading has been inactive with very light demand. Not enough purchases for a full market trend. Last week in the Southern Plains live purchases traded at 120.00. For the prior week in Nebraska live and dressed purchases traded mostly at 123.00 and 195.00, respectively. Last week in Colorado live purchases traded from 120.00 -123.00. For the previous week in the Western Cornbelt live and dressed purchases traded mostly from 123.00-125.00 and 195.00-196.00, respectively.
The USDA is reporting live cash trades from 121.51 – 123.00 and dressed trades at 194.00 so far this week.
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 15, 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.**
Senior Market Strategist
Walsh Trading, Inc.
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.