Walsh Trading Daily Insights
Commentary
June Lean Hogs continued higher after Monday’s gap higher surge. It made a new high at 113.80 and settled near the high at 113.55. Settlement was above the 112.975 resistance level, making resistance at 114.675 the next target for futures. Resistance then comes in at 115.925. A failure from 112.975, could see support tested at 111.675. Support then comes in at the gap created from Friday’s high at 109.725 and Monday’s low at 110.875.
The Pork Cutout Index increased and is at 109.78 as of 5/03/2021.
The Lean Hog Index increased and is at 107.10 as of 4/30/2021.
Estimated Slaughter for Tuesday is 487,000 which is above last week’s 486,000 and last year’s 302,000. Monday’s slaughter was revised lower to 478,000. The estimated weekly total (so far) is 965,000, which is below last week’s 969,000 and above last year’s 582,000.
August Feeder Cattle broke down hard as corn continues its surge. The breakdown took price below the 100 DMA at 143.07, making the low at 142.225. The low was just below support at 142.40. It was able to eke out a settlement above the 100 DMA at 143.175. If price can hold above settlement, we could see a test of resistance at 144.25. Resistance then comes in at 145.05. A failure from the 100 DMA could see price re-test support at 142.40. Support then comes in at 140.775.
The Feeder Cattle Index increased and is at 132.76 as of 5/03/2021.
June Live Cattle broke down below its 117.625 – 114.55 trading range, making the session low at 112.575. The breakdown took price below the flattening 200 DMA on the continuous chat at 114.08. It settled below the 200 DMA at 113.025. The decline stopped just above the 112.35 support level. A failure from settlement could see price test support at 112.35. Support then comes in at 110.80. If price can hold above settlement, a test of the 200 DMA is possible. Resistance then comes in at 114.65.
Boxed beef cutouts increased as choice cutouts rose 1.92 to 301.22 and select inched higher 0.12 to 283.91. The choice/ select spread widened to 17.31 and the load count was 130.
Tuesday’s estimated slaughter is 121,000, which is even with last week and above last year’s 85,000. The weekly estimated total (so far) is 235,000, which is below last week’s 238,000 and above last year’s 163,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading in Nebraska has been light to moderate on moderate demand with live purchases steady to 0.50 higher at 118.00 compared to the last reported live market on Monday, and dressed purchases 1.00 to 2.00 lower from 188.00-190.00 compared to last week. In the Western Cornbelt negotiated cash trading has been light to moderate on moderate demand with live purchases steady to 3.00 lower compared to last week from 117.00-119.00, and a few dressed purchases from 187.00-190.00, however not enough dressed purchases for a full market trend. Last week in the Western Cornbelt dressed purchases traded from 190.00-191.00. Negotiated cash trading in the Southern Plains and Colorado has been limited on light demand, not enough purchases for a full market trend. Last week in the Southern Plains live purchases traded from 118.00-119.00. In Colorado last week, live purchases traded from 119.00-120.00.
The USDA is indicating cash trades this week for live cattle from 117.00 – 119.00 and dressed trades from 187.00-192.00.
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, May 6, 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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