Walsh Trading Daily Insights
Commentary
June Lean Hogs gap opened higher, made the session low and surged, nearly going up limit to the session high at 109.65. It settled nearby at 109.125. The break out higher took price out of its trading range from 107.075 to 102.975, but it still hasn’t taken out resistance at 109.85 and the April 12th high at 110.075. If price can take out the April 12th high, a test of resistance at 111.675 is possible. Resistance then comes in at 112.975. A failure from settlement, could see support tested at 107.925. Support then comes in at the gap created from Tuesday’s high at 107.075 and Wednesday’s low at 107.425. Cash hog prices shot higher on Tuesday and futures followed cash higher on Wednesday. With demand strong both at home and our export markets and slaughter levels indicating tightness in the cash market as weights are declining with the lower numbers so packers are being aggressive in their cash purchases. Exports are reported before the open on Thursday and will most likely influence the direction of futures trading, in my opinion.
The Pork Cutout Index decreased and is at 112.10 as of 4/27/2021.
The Lean Hog Index increased and is at 107.39 as of 4/26/2021.
Estimated Slaughter for Wednesday is 483,000 which is below last week’s 485,000 and above last year’s 267,000. The estimated weekly total (so far) is 1,452,000, which is below last week’s 1,455,000 and above last year’s 853,000.
August Feeder Cattle tried to rally early in the trading session reaching 152.50 for the session high. The high was just above resistance at 152.30 and price broke down from there to the session low at 147.975. It settled at 148.90. Settlement was above the key level at 148.40. If price can hold above settlement, we could see a re-test of resistance at 149.975. Resistance then comes in at 151.55, 152.30 and then 153.50. A failure from 148.40 could see price test support at 147.30. Support then comes in at 146.20.
The Feeder Cattle Index declined and is at 135.07 as of 4/27/2021.
June Live Cattle also failed in its attempt to rally early in the trading session, making its high at 117.15. It broke down and traded to the session low at 115.20. It settled at 115.45. A failure from settlement could see price test support at 114.65. Support then comes in at 113.90. If price can hold above settlement, a test of resistance at 116.55 is possible. A breakout above here could see resistance at 117.825 tested. Resistance then comes in at 119.375.
Boxed beef cutouts were mixed as choice cutouts increased 1.51 to 292.50 and select decreased 0.53 to 279.00. The choice/ select spread widened to 13.50 and the load count was 130.
Wednesday’s estimated slaughter is 120,000, which is even with last week and above last year’s 75,000. The weekly estimated total (so far) is 358,000, which is below last week’s 360,000 and above last year’s 227,000.
The USDA report LM_Ct131 states: So far for Wednesday negotiated cash trading in the Texas Panhandle and Nebraska has been moderate with moderate demand. In the Texas Panhandle, compared to Tuesday, live purchases traded steady to 1.00 lower from 118.00-119.00. In Nebraska, compared to last week, live purchases traded 2.00-3.00 lower from 119.00-120.00 and dressed purchases traded 1.00-4.00 lower from 188.00-191.00. Thus far for Wednesday in Kansas, Colorado and Western Cornbelt negotiate cash trading has been slow on light demand. In Kansas a few live purchases traded from 118.00-119.00. In Colorado a few live purchases traded from 119.00-120.00. In the Western Cornbelt a few live and dressed purchases traded at 119.00 and 191.00, respectively. However, not enough purchases in these regions for a full market trend. In Kansas on Tuesday live purchases traded at 119.00. In Colorado on Monday live purchases traded at 119.00. Last week in the Western Cornbelt 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 117.00 – 122.00 and dressed trades from 188.00-190.00.
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.**
Ben DiCostanzo
Senior Market Strategist
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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