Walsh Trading Daily Insights
Commentary
June Lean Hogs opened strong, well above Thursday’s low and settlement price. It was able to overtake yesterday’s high by a couple of ticks to the Friday high at 105.975. It settled at 105.725. The low was at 104.575. If price can hold above settlement, a re-test of the resistance at 106.85 is possible. Resistance then comes in at 107.925. A failure from support at 104.35, could see the Thursday low revisited at 102.975. Support then comes in at 101.975.
The Pork Cutout Index increased and is at 114.01 as of 4/22/2021.
The Lean Hog Index increased and is at 105.99 as of 4/21/2021.
Estimated Slaughter for Friday is 474,000 which is above last week’s 468,000 and last year’s 360,000. Saturday slaughter is expected to be 63,000, which is below last week’s 75,000 and last year’s 186,000. The estimated weekly total is expected to be 2,473,000, which is above last week’s 2,469,000 and last year’s 1,991,000.
August Feeder Cattle opened higher and rallied, settling in positive territory at 149.90. The rally, however, took place within the confines of Thursday’s trading range, forming an inside candlestick. Settlement was just below resistance at 149.975. This will probably key trade on Monday. A rally past 149.975 could see price test resistance at 151.55. Resistance then comes in at 152.30. A failure from settlement could see price test support at 148.40. Support then comes in at 147.30.
The Feeder Cattle Index fell and is at 136.36 as of 4/222/2021.
June Live Cattle consolidated on Friday, trading within Thursday’s trading range as traders took a break waiting for the Cattle on Feed Report. June settled at 115.725, which is below the key level at 116.55. A failure from settlement could see price make its way down to support at 114.65. If price can rally past resistance at 116.55, a test of resistance at 117.825 is possible. The cattle on feed report came out bullish in my opinion, as placements came in below the average of expectations. Placements came in at 28% above last year with average estimates from the Daily Livestock Report from the CME at a plus 33.8%. On Feed came in at a plus 5%, with average estimates at a plus 6.1%. Marketings were at plus 1%, with average estimates at a plus 1.1%.
Boxed beef cutouts were mixed as choice cutouts rose 1.46 to 283.77 and select decreased 1.56 to 272.13. The choice/ select spread widened to 11.64 and the load count was 124.
Friday’s estimated slaughter is 113,000, which is even with last week and above last year’s 85,000. Saturday Slaughter is expected to be 74,000, which is above last week’s 70,000 and last year’s 45,000. The weekly estimated total is expected to be 665,000, which is above last week’s 640,000 and last year’s 470,000.
The USDA report LM_Ct131 states: Thus far for Friday negotiated cash trading has been mostly inactive on very light demand in the 5 Area Feeding Regions. Not enough trades for a market trend. Wednesday was the last fully reported market in the Southern Plains. In the Texas Panhandle live purchases traded at 120.00 and Kansas live purchases traded from 118.00-120.00. Thursday was the last fully reported market in the Northern Plains and Western Cornbelt. In Nebraska and Colorado live purchases traded at 121.00 and, in Nebraska, dressed purchases traded 192.00. In the Western Cornbelt live purchases traded from 120.00-122.00 and dressed purchases traded at 192.00.
The USDA is indicating cash trades this week for live cattle from 118.00 – 124.00 and dressed trades from 190.00 – 196.00.
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 29, 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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