Perspective Commodity Snapshot Template
Walsh Trading Daily Insights
Commentary
August Lean Hogs opened surged on Monday, trading and settling up limit for the session. Settlement was at 102.775 which is above resistance at 101.975 but below the 100 DMA, which is at 103.09. If price fails from settlement, a re-test of support at 101.975 is possible. Support then comes in at 100.075 and then 98.475. If price can over-take the 100 DMA, resistance could be tested at 104.30 and then 106.85. China announced it will support pork prices by buying pork for its state reserves. Hog and pork prices have plummeted in that country as hog farmers sold off their herds as the ASF disease is still making its way across China, in my opinion. Prices plunged to levels the government set to invoke supporting the market. Cash hogs rose big in response to the announcement by the Chinese agency.
The Pork Cutout Index declined and is at 111.65 as of 6/25/2021.
The Lean Hog Index fell and is at 115.43 as of 6/24/2021.
Estimated Slaughter for Monday is 454,000, which is below last week’s 468,000 and last year’s 466,000.
August Feeder Cattle went in the opposite direction of Hogs as corn futures surged leading to the massive selloff. Feeders broke down below support at 157.30 – 157.92 to the low at 156.05. This is just below the 156.075 support level. Settlement was just above support at 156.35. If price can hold settlement, resistance could be re-tested at the 157.30 – 157.92 zone. Resistance then comes in at 160.625. A failure from the low could see price test support at 155.275 and then 154.25.
The Feeder Cattle Index decreased and is at 146.29 as of 6/24/2021. Index prices have not updated.
August Live Cattle traded lower and made the session low at 121.125. It settled at 121.60. Settlement was just below support at 121.90. If price can rally past resistance (122.825), a re-test of resistance at 124.30 is possible. A breakdown from settlement could see price test support at 120.80 and then 119.375. Traders are concerned that pressure will be on cash prices due to the upcoming Independence Day holiday.
Boxed beef cutouts collapsed as choice cutouts declined 7.13 to 297.43 and select decreased 2.22 to 273.96. The choice/ select spread narrowed to 23.47 and the load count was 119.
Monday’s estimated slaughter is 118,000, which is with last week and above last year’s 117,000.
The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been slow on light demand in Nebraska with early live purchases steady to 1.50 higher at 126.50 compared to last week. Not enough dressed purchases for a full market trend. Last week in Nebraska dressed purchases traded at 197.00. Negotiated cash trading in the Western Cornbelt and Kansas 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 the Texas Panhandle. The latest reported market in the Southern Plains was two weeks ago with live purchases at 122.00. Last week in the Western Cornbelt live purchases traded from 125.00-126.00 and dressed purchases traded at 197.00.
The USDA is indicating cash trades this week for live cattle 122.00 – 126.50 and dressed trades at 202.00 (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, July 1, 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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