Walsh Trading Daily Insights
Commentary
October Lean Hogs was able to hold support at the 83.325 level on Wednesday, making the session low at Tuesday’s settlement price at 83.875. Short-covering took over (in my opinion) and Hogs surged, trading past resistance at 85.325 to the session high at 86.10 and settling above it at 85.85. Export Sales come out Thursday morning and could be a market mover. If price can hold the 85.325 support level a test of resistance at 87.10 is possible. A failure from 85.325 could see support tested at 83.325.
The Pork Cutout Index decreased and is at 123.29 as of 8/10/2021.
The Lean Hog Index decreased and is at 110.77 as of 8/09/2021.
Estimated Slaughter for Wednesday is 474,000, which is above last week’s 472,000 and below last year’s 480,000. Tuesday’s slaughter was revised lower to 472,000. The estimated total for the week (so far) is 1,402,000, which is above last week’s 1,349,000 and last year’s 1,394,000.
September Feeder Cattle continued to flail at the 163.50 level. This time unable to trade above it, making the session high at 163.35 and then breaking down to the session low at 162.10. The low is just above support at 162.10 and price recovered off the low to settle at 162.825. A pullback from settlement could see price re-visit support at 162.00 and then 160.625. If feeders can take out resistance at 163.50, a re-test of resistance at 165.775 is possible.
The Feeder Cattle Index decreased and is at 156.19 as of 8/10/2021.
October Live Cattle continues to spin its wheels around the key level at 128.10. Today’s session was a sleep-walk session resulting in a narrow range from 128.325 to 127.275 with settlement at 127.575. It is the narrowest range in the last 7 sessions and could lead to a directional play if we can get some movement in the cash market. The price action in the contract has stagnated as traders just don’t seem to believe cash is going anywhere any time soon. Packers are in complete control of the action as cutout prices are super strong and the price they pay producers have gone nowhere. If price can take out resistance at 128.10, a test of the high at 129.875 is possible. Resistance is next at 130.45. A breakdown from settlement could see price test support at 126.625. Support then comes in at 125.80.
Boxed beef cutouts were higher as choice cutouts surged 5.48 to 310.80 and select surged 3.38 to 287.99. The choice/ select spread widened to 22.81 and the load count was 110.
Wednesday’s estimated slaughter is 120,000, which is below last week’s 121,000 and above last year’s 117,000. Tuesday’s slaughter was revised lower to 117,000. The estimated total for the week (so far) is 350,000, which is below last week’s 359,000 and above last year’s 348,000.
The USDA report LM_Ct131 states: Thus far for Wednesday in the Southern Plains negotiated cash trading has been slow on light to moderate demand. Compared to last week, a few early live purchases have traded mostly steady at 121.00. In Nebraska and Western Cornbelt negotiated cash trading has been limited with light demand. Not enough purchases in these regions for a market trend. For prior week in Nebraska live and dressed purchases traded at 125.00 and 198.00, respectively. For the previous week in the Western Cornbelt live and dressed purchases traded from 125.00-126.00 and at 198.00, respectively.
The USDA is indicating cash trades this week for live cattle at 119.00 – 126.00 and at 198.00 – 204.00 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, August 12, 2021 at3:00 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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