Walsh Trading Daily Insights
June Lean Hogs is now in a trading range as traders are wary that cutouts and cash hogs may be peaking in the near-term. The trading range is from 107.075 at the high to 102.975 at the low. Tuesday’s settlement was in the upper end of the range at 106.675. If price can take out the high of the range, a test of the resistance at 107.925 is possible. Resistance then comes in at 109.85. A failure from settlement, could see support tested at 104.35. Support then comes in at 102.975 and then 101.975.
The Pork Cutout Index decreased and is at 113.15 as of 4/26/2021.
The Lean Hog Index increased and is at 107.17 as of 4/23/2021.
Estimated Slaughter for Tuesday is 486,000 which is above last week’s 485,000 and last year’s 281,000. Monday’s slaughter was revised lower to 483,000 from 489,000. The estimated weekly total (so far) is 969,000, which is below last week’s 970,000 and above last year’s 586,000.
August Feeder Cattle opened lower, made the session low at 149.70 and surged early in the trading session, racing to the high at 153.625. The high was just above resistance at 153.50 and this proved to be too much for Feeders to overcome. Price broke down and settled near the low at 150.075. Settlement was just above the key level at 149.975. This will probably key trade on Wednesday. If price can hold above settlement, we could see a re-test of resistance. Resistance is at 151.55, 152.30 and then 153.50. A failure from 149.975 could see price test support at 148.40. Support then comes in at 147.30. This is a key level in my opinion and a failure below here could see August Feeder cattle challenge the rising long-term moving averages. The first one is the rising 50 DMA now at 146.21. The rising 100 DMA is at 142.69 and the rising 200 DMA is at 141.13.
The Feeder Cattle Index declined and is at 135.22 as of 4/26/2021.
June Live Cattle opened higher and rallied to the session high at 117.625. The rally stalled just below resistance at 117.825 and broke down to the session low at 115.75. It settled at 115.85, which is below the key level at 116.55. A failure from settlement could see price test support at 114.65. Support then comes in at 113.90. If price can rally past resistance at 116.55, a re-test of resistance at 117.825 is possible. Resistance then comes in at 119.375.
Boxed beef cutouts surged as choice cutouts increased 5.79 to 290.99 and select increased 5.18 to 279.53. The choice/ select spread widened to 11.46 and the load count was 105.
Tuesday’s estimated slaughter is 121,000, which is even with last week and above last year’s 75,000. The weekly estimated total (so far) is 238,000, which is below last week’s 240,000 and above last year’s 152,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading in Nebraska and the Western Cornbelt has been mostly inactive on very light demand, not enough purchases for a full market trend. Negotiated cash trading has been at a standstill in all other major feeding regions. Last week in the Texas Panhandle live purchases traded at 120.00. In Kansas, live purchases traded from 118.00-120.00. Last week in Nebraska, live purchases traded from 121.00-123.00 and dressed purchases traded at 192.00. On Monday in Colorado live purchases traded at 119.00. In the Western Cornbelt last week, live purchases traded from 120.00-123.00 and dressed purchases traded at 192.00.
The USDA is indicating cash trades this week for live cattle from 118.00 – 120.00 and dressed trades at 190.00.
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.**
Senior Market Strategist
Walsh Trading, Inc.
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