Walsh Trading Daily Insights
June Lean Hogs surged on Tuesday, coming close to going limit up at the end of the trading session making the high at 111.175. The low was at 108.525. Settlement was at 110.65. Resistance is at 111.675. A rally past 111.675 could see resistance revisited at 112.975. Resistance then comes in at 114.675. A failure from settlement could see support re-tested at 109.85. Support then comes in at 107.925.
The Pork Cutout Index increased and is at 115.13 as of 5/17/2021.
The Lean Hog Index increased and is at 111.42 as of 5/14/2021.
Estimated Slaughter for Tuesday is 478,000 which is below last week’s 485,000 and above last year’s 406,000. The estimated weekly total (so far) is estimated to be 956,000, which is below last week’s 968,000 and above last year’s 801,000.
August Feeder Cattle tested resistance at 153.50 early in the trading session making the high just below it at 153.375. Price reversed course as an early rally in corn weighed down Feeders, taking price down to the session low at 150.70. It bounced off the low and settled at 151.925. Settlement was above the key level at 151.55. A rally from settlement could see resistance at 152.30 re-tested. Resistance then comes in at 153.50 and then 154.25. A failure from 151.55 could see price test support at 149.975. Support then comes in at 147.30, 146.20 and then 145.05.
The Feeder Cattle Index decreased and is at 133.70 as of 5/17/2021.
August Live Cattle is now the lead contract in the cattle complex as its volume has exceeded the June volume. It opened higher made the low at 118.95 and rallied the rest of the session to the high at 120.225. It settled at nearby at 119.725 and settlement was above the key level at 119.375. If cattle can hold above settlement, a test of resistance at 120.80 is possible. Resistance then comes in at 121.90. A breakdown from the key level at 119.375 could see support revisited at 117.825. Support then comes in at 116.55 and then 114.65. The cash market has shown some steady trades with last week and Argentina is stating it will halt meat exports for 30 days as it combats domestic inflationary forces in the meat marketplace. Producers are protesting the ruling saying halting exports will keep out much needed foreign capital. Boxed Beef prices continue to climb as prices are at record levels (if you exclude last year’s pandemic surge).
Boxed beef cutouts continued its surge as choice cutouts rose 3.72 to 323.34 and select increased 2.16 to 299.05. The choice/ select spread widened to 24.29 and the load count was 114.
Tuesday’s estimated slaughter is 120,000, which is above last week’s 118,000 and last year’s 105,000. The weekly estimated total (so far) is estimated to be 235,000, which is above last week’s 230,000 and last year’s 203,000.
The USDA report LM_Ct131 states: Thus far for Tuesday in the Southern Plains negotiated cash trading has been slow with light demand. In the Texas Panhandle live purchases have traded steady to 0.50 higher from 119.00- 12.00 when compared to last week. In Kansas live purchases have traded steady from 119.00- 120.00 when compared to the prior week. So far for Tuesday in the Northern Plains and Western Cornbelt negotiated cash trading has been limited on light demand. In Nebraska a few live purchases traded at 120.00. In the Western Cornbelt a few live purchases traded at 120.00. However, not enough purchases for a full market in any of these regions. For the prior week in Nebraska live and dressed purchases traded from 120.00-121.00 and at 191.00, respectively. Last week in Colorado live purchases traded at 120.00. For the previous week in the Western Cornbelt live and dressed purchases traded at mostly 120.00 and from 188.00-191.00, respectively.
The USDA is indicating cash trades this week for live cattle from 119.00 – 121.00 and dressed trades from 190.00 – 191.00.
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 20, 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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