Walsh Trading Daily Insights
Commentary
July Lean Hogs gap opened lower at 117.10, which is just below support levels 117.29 (21 DMA) and 117.20. This proved to be too big a hurdle to overcome as it turned out to be the low of the day. Price grinded higher the rest of the session, making the high at the end of the day at 118.55 and settling nearby at 118.50. If price can hold settlement, a test of resistance at 119.90 is possible. Resistance then comes in at 122.275. A failure at settlement could see price revisit support. A break down below support could see price test support at 115.925.
The Pork Cutout Index decreased and is at 132.94 as of 6/14/2021.
The Lean Hog Index increased and is at 121.89 as of 6/11/2021.
Estimated Slaughter for Tuesday is 484,000, which is below last week’s 485,000 and above last year’s 460,000. Monday’s slaughter was revised lower 474,000. The weekly estimated slaughter (so far) is 958,000, which is below last week’s slaughter at 963,000 and last year’s 917,000.
August Feeder Cattle gap opened higher, closed the gap at the session low (154.725) and then rallied the rest of the session, making the high at 157.40 and settling at 156.825. Retreating corn prices excited traders and Feeders have been volatile as it follows the price action in corn. Cash prices have started to stabilize as traders hope corn has seen its highs. August feeders stalled just above resistance at 157.30 and below the 38.2% retracement level of the all-time high (on my continuous chart) at 245.75 and the April low at 103.625 at 157.92. If price can rally past this zone, we could see a test of resistance at 5/26/2021 high at 158.725. Resistance then comes in at 160.625. A failure from settlement could see price re-test support at 156.075. Support then comes in at 155.275 and 154.25. Price will likely continue to react to changes in the price of corn.
The Feeder Cattle Index increased and is at 140.22 as of 6/14/2021.
August Live Cattle opened higher, made the low at 121.30, and then rallied the rest of the session to the high at 124.125. This is the highest futures have been since April. It settled nearby at 123.90. Cash prices are firm early in the week and has traded as high as 124.00 on a live basis, creating optimism going forward. If price can rally past 124.30, a test of resistance at 125.80 is possible. Resistance then comes in at 126.625. A breakdown from settlement could see price test support at 122.825. Support then comes in at 121.90 and then 120.80.
Boxed beef cutouts decreased as choice cutouts declining 1.04 to 334.43 and select crashed 5.13 to 298.28. The choice/ select spread narrowed to 36.15 and the load count was 128.
Tuesday’s estimated slaughter is 121,000, which is above last week’s 120,000 and last year’s 117,000. Monday’s slaughter was revised lower to 116,000. The weekly estimated slaughter (so far) is 237,000, which is above last week’s 235,000 and last year’s 233,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading in Nebraska and the Western Cornbelt has been limited on light demand with a few dressed purchases at 195.00, however not enough for a full market trend. Last week in Nebraska live purchases traded at 120.00 and dressed purchases traded from 190.00-191.00. In the Western Cornbelt last week live purchases traded from 120.00-121.00 and dressed purchases traded from 190.00-191.00. Negotiated cash trading has been mostly inactive on very light demand in Kansas, and at a standstill in the Texas Panhandle. Not enough purchases in either region for a full market trend. Last week in the Southern Plains live purchases traded from 119.00-120.00.
The USDA is indicating cash trades this week for live cattle from 120.00 – 124.00 and dressed trades at 192.00 – 195.00 (so far).
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, June 17, 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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