Walsh Trading Daily Insights
June Lean Hogs recouped most of Friday’s huge decline, trading up from the session low at 101.10 to the high at 105.375 and settling at 104.325. Even with the strong rally, June Hogs formed an inside candlestick, indicating consolidation within Friday’s huge decline. Settlement was below the key level at 104.35. If price can trade above 104.35, a test of the Monday high is possible. If bulls take charge from there, resistance at 106.85 is next. A failure from settlement could see support tested at 101.975. At least for one day, traders realized the Friday decline made futures cheap compared to the rising Lean Hog Index and aggressively bought the breakdown after chomping at the bit all weekend.
The Pork Cutout Index decreased and is at 111.69 as of 4/16/2021.
The Lean Hog Index increased and is at 103.24 as of 4/15/2021.
Estimated Slaughter for Monday is 490,000 which is above last week’s 488,000 and last year’s 365,000.
August Feeder Cattle opened at the high of the day at 154.30. It collapsed and traded down to the session low at 150.675. It found support here and rebounded to settle at 152.775. Settlement was above the key level at 152.30. A failure from 152.30 could see price re-test support at 151.55, the Monday low and then 149.975. If price can rally from settlement, we could see a re-test of resistance at 153.50 and then 154.25. Resistance then comes in at 155.275. Corn prices rose and the Feeder Cattle Index continues to weaken, with August now the lead contract, it seems traders are thinking futures are overpriced compared to the index, in my opinion.
The Feeder Cattle Index decreased and is at 140.13 as of 4/16/2021.
June Live Cattle opened at the session high (119.40) and then broke down past the 100 DMA (118.70) and the 117.825 support level to the session low at 117.55. Price bounced back and settled at 118.60. Settlement was below the 100 DMA, so that puts cattle in a technically weakened condition, in my opinion. A failure from settlement could see price re-test support at 117.825. Support then comes in at 116.55. If cattle can rally past the 100 DMA, a test of resistance at 119.375 is possible. Resistance then comes in at 120.80.
Boxed beef cutouts ticked higher as choice cutouts rose 0.12 to 276.17 and select increased 0.03 to 269.13. The choice/ select spread widened to 7.04 and the load count was 91.
Monday’s estimated slaughter is 119,000, which is above last week’s 112,000 and last year’s 87,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been at a standstill in the Southern and Northern Plains. In the Western Cornbelt negotiated cash trading has been mostly inactive with very light demand. Not enough purchases for a market trend. Last week in the Texas Panhandle live purchases traded at 120.00. In Kansas live purchases traded from 120.00-121.00. For the prior week in Nebraska live and dressed purchases traded from 122.00-126.00 and at 196.00, respectively. In Colorado live purchases traded from 122.00-123.00. For the previous week in the Western Cornbelt live and dressed purchases traded from 122.00-124.00 and from 194.00-196.00, respectively.
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 22, 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.
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