Walsh Trading Daily Insights
Commentary
August Lean Hogs gap opened higher, traded to the session high at 104.175 and then broke down closing the gap and making the session low at 102.55. It was able to bounce back off the low and settled at 103.626. The high was just below resistance at 104.30 and the low was above support at 1011.975. Settlement was above the rising 100 DMA at 103.34. If price can’t stay above the 100 DMA, a re-test of support at 101.975 is possible. Support then comes in at 100.075 and then 98.475. If price can push past resistance at 104.30, price could approach resistance at 106.85.
The Pork Cutout Index declined and is at 110.46 as of 6/28/2021.
The Lean Hog Index decreased and is at 114.19 as of 6/25/2021.
Estimated Slaughter for Tuesday is 461,000, which is below last week’s 475,000 and last year’s 472,000. The weekly estimated total (so far) is 915,000, which is lower than last week’s 943,000 and last year’s 938,000.
August Feeder Cattle broke down early as corn rallied to its session highs. Feeders made the low at 155.40 and reversed course and rallied to its high at 158.15 as corn prices pulled back from its rally. It pulled back and settled at 157.40. Settlement is within the 157.30 – 157.92 resistance zone. If feeders can hold settlement, and corn breaks down, a test of the June 25th high at 159.675 is possible. Resistance then comes in at 160.625. A breakdown from 157.30 could see price test support at 156.075, 155.275 and then 154.25.
The Feeder Cattle Index increased and is at 146.72 as of 6/28/2021.
August Live Cattle traded in a listless manner, making an inside candle within an inside candle therefore going nowhere fast. With the Independence Day holiday approaching traders don’t seem to be expecting much in the cash trade and futures are dragging in response. The Tuesday range was 123.20 high and 120.625 low. It settled at 121.925. Settlement was just above support at 121.90. If price can rally past the Tuesday high, 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.
Boxed beef cutouts continued its fall from grace as choice cutouts declined 5.09 to 292.34 and select decreased 3.56 to 270.40. The choice/ select spread narrowed to 21.94 and the load count was 157.
Tuesday’s estimated slaughter is 120,000, which is below last week’s 121,000 and even with last year. The estimated total for the week (so far) is 238,000, which is below last week’s 239,000 and above last year’s 237,000.
The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading has been mostly inactive on very light demand in the Western Cornbelt. Not enough purchases for a full market trend. Negotiated cash trading has been at a standstill in all other major feeding regions. On Monday in Nebraska live purchases traded at 126.50, and last week dressed purchases traded at 197.00. Last week in the Western Cornbelt live purchases traded from 125.00-126.00 and dressed purchases traded at 197.00. The latest reported market in the Southern Plains was two weeks ago with live purchases at 122.00.
The USDA is indicating cash trades this week for live cattle 122.00 – 126.50 and dressed trades at 197.00 – 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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