Walsh Trading Daily Insights
Commentary
August Lean Hogs opened lower, made the session high at 105.85 and broke down to the session low at 103.80. The trading range tested moving average support at the 8 DMA at 104.09 and moving average resistance at the 100 DMA at 105.79. It settled in the lower end of the range at 104.475. If price fails at settlement price, a re-test of the Monday low is possible. Support then comes in at 101.975, 100.075 and then 98.475. If price can hold settlement, a test of resistance at 106.85 is possible. Resistance then comes in at 107.925. There are gaps above and below the market. Above the market has a gap from the June 21st high at 107.20 and the low from June 18 at 108.50. Below the market is a gap from the July 9th high at 101.975 to the July 12th low at 102.10.
The Pork Cutout Index increased and is at 118.91 as of 7/16/2021.
The Lean Hog Index increased and is at 111.89 as of 7/15/2021.
Estimated Slaughter for Monday is 457,000, which is above last week’s 449,000 and below last year’s 469,000.
August Feeder Cattle opened lower, traded to the session low at 154.10 and then rallied the rest of the session, making the high at 157.875 and settling nearby at 157.375. The breakdown took price below support at 154.25 and the rally took price back up to the 157.30- 157.90 resistance zone. Corn was strong on the open and then broke down from its high, going into negative territory at various points and creating the positive reversal in Feeders, in my opinion. A breakdown below settlement could see price re-test support at 156.075 and then 155.275. Support then comes in at 154.25 and then 153.50. If feeders can rise above the resistance zone from 157.30 – 157.90, a test of resistance at 160.625 is possible. Resistance then comes in at theJuly 7th high at 161.10 and then 162.00.
The Feeder Cattle Index decreased and is at 150.73 as of 7/16/2021.
October Live Cattle is now the lead contract as its volume has exceeded the August volume. It opened lower, made the session high at 125.50 and then broke down to the session low at 124.05. It bounced and settled near the high at 125.10. The breakdown took price below support at 124.30 and the high was below resistance at 125.80. A breakdown from settlement could see price re-test support at 124.30 and then possibly work its way down to support at 122.825. If price can hold settlement, a re-test of resistance at 125.80 is possible. Resistance then comes in at 126.625.
Boxed beef cutouts were lower as choice cutouts declined 1.45 to 266.49 and select decreased 2.30 to 249.49. The choice/ select spread widened to 17.00 and the load count was 125.
Monday’s estimated slaughter is 118,000, which is below last week’s 120,000 and above last year’s 115,000.
The USDA report LM_Ct131 states: Thus far for Monday in the Southern Plains and Nebraska negotiated cash trading has been at a standstill. In the Western Cornbelt negotiated cash trading has been mostly inactive with very light demand. Not enough purchases for a market trend. Last week in the Southern Plains live purchases traded at 120.00. In Nebraska for the prior week live and dressed purchases traded from 123.00- 125.00 and from 196.00-202.00, respectively. In the Western Cornbelt for the previous week live and dressed purchases traded at 125.00 and from 196.00-197.00, respectively.
The USDA is indicating no cash trades this week for live cattle and on a dressed basis (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 22, 2021 at 2:00 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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