Walsh Trading Daily Insights
Commentary
October Lean Hogs opened higher and broke down to the session low at 91.625. It recovered and rallied to the high at 93.275. It settled at 93.10. The rally stalled once again just below resistance at 93.50 and settlement was above the key level at 92.375. The session’s range was within Friday’s range forming an inside candlestick. If Hogs can hold settlement, a re-test of resistance at 93.50 is possible. Resistance then comes in at 95.30. A breakdown from 92.375 could see support tested at 90.40. Support then comes in at 88.325.
The Pork Cutout Index increased and is at 121.72 as of 7/23/2021.
The Lean Hog Index decreased and is at 112.21 as of 7/22/2021.
Estimated Slaughter for Monday is 468,000, which is above last week’s 457,000 and last year’s 456,000.
August Feeder Cattle rallied to a new high for the up move as corn was lower most of the trading session and traders reacted positively to the Cattle on Feed Report. It reached its high at 163.15, which is just below resistance at 163.50 and pulled back to settle at 162.20. Settlement was above the key level at 162.00, but the pullback came as corn recovered its losses and settled in positive territory. So, in my opinion corns’ ups and downs are the driving force to this rally. The futures rally has lit a fire on cash prices as the index has been following futures higher and is now above 150.00. If feeders can hold settlement, a re-test of resistance at 163.50 is possible. Resistance then comes in at 165.775. A breakdown from settlement could see support re-visited at 160.625. Support then comes in at 157.30 – 157.90.
The Feeder Cattle Index increased and is at 153.85 as of 7/23/2021.
October Live Cattle opened higher and surged after making the session low at 127.075. It rallied to a new high for the up move at 129.275 and settled nearby at 129.20. The Cattle on Feed Report has traders anticipating higher futures prices going forward. We will see how low this lasts as Cash traded lightly in Kansas and the Western Cornbelt from 119.00 – 123.00. Packers didn’t seem impressed that futures were surging and producers took what the packers gave them. The rally took price past resistance at 128.10 and the strong close puts resistance at 130.45 in play. A breakdown from settlement could see price test support now at 128.10. support then comes in at 126.625.
Boxed beef cutouts were higher as choice cutouts rose 1.30 to 267.93 and select increased 0.98 to 250.92. The choice/ select spread widened to 17.00 and the load count was 106.
Monday’s estimated slaughter is 119,000, which is above last week’s 115,000 and last year’s 117,000.
The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been mostly inactive on very light demand in Kansas and the Western Cornbelt. Not enough purchases in either region for a full market trend. Negotiated cash trading has been at a standstill in all other major feeding regions. Last week in the Southern Plains live purchases traded at 119.00. In Nebraska last week live and dressed purchases traded from 120.00-123.00 and at 195.00, respectively. In the Western Cornbelt last week live and dressed purchases traded from 120.00-124.00 and from 195.00-202.00, respectively.
The USDA is indicating cash trades this week for live cattle from 119.00 – 123.00 and nothing 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 29, 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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