Walsh Trading Daily Insights
Commentary
October Lean Hogs gap opened higher and surged, nearly going up the limit and making the session high at 89.30. It settled at 89.00. It was a strong session, but Hogs have strong resistance just above that must be surpassed going forward. The declining 21 DMA is at 89.83, there is a gap from 89.70 to 89.975, the rising 200 DMA is at 90.19 and then there is resistance at 90.40. Support is at 88.325, the upward sloping trendline at 87.45 and the gap created on Monday’s open from 86.875 to 87.25. Futures are trading well below the cash index and some narrowing is taking place, now that August is off the board.
The Pork Cutout Index increased and is at 123.31 as of 8/13/2021.
The Lean Hog Index decreased and is at 109.90 as of 8/12/2021.
Estimated Slaughter for Monday is 477,000, which is above last week’s 456,000 and below last year’s 485,000. Friday’s slaughter was revised lower to 463,000.
September Feeder Cattle continues to be locked in between the key levels at 163.50 to 162.00. The Monday high was at 163.50 and the low at 161.225. Settlement was right at the key level at 162.00. Feeder Cattle couldn’t rally even with weaker corn. Traders are apprehensive for the moment as these levels are extremely high and the WASDE report was bullish in tone for corn, in my opinion. A pullback from settlement could see price test support at 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 155.83 as of 8/12/2021. (No update for Monday yet)
October Live Cattle opened unchanged and broke down to the session low at 127.45. This is just below the rising 21 DMA at 127.51 and traders used this as a springboard to jump to the session high at 129.45. It settled nearby at 129.125. The rally puts cattle above the key level at 128.10 which is a nice development, but it still must overcome the129.875 rally high and then resistance at 130.45. A pullback from settlement could see price revisit support at 128.10, keeping cattle in check and in its trading range.
Boxed beef cutouts were higher Monday Morning as choice cutouts increased 2.59 to 327.42 and select jumped 3.13 to 301.15. The choice/ select spread narrowed to 26.27 and the load count was 35.
Monday’s estimated slaughter is 119,000, which is above last weeks and last year’s 113,000. Friday’s slaughter was revised lower to 116,000.
The USDA report LM_Ct130 states: For Friday in the Southern Plains negotiated cash trading was mostly inactive with light demand. In Nebraska and Western Cornbelt negotiated cash trading was slow with moderate demand. In Nebraska a few live purchases traded from 124.00-125.00. However, not enough purchases for a full market trend in any region. In the Southern Plains on Wednesday live purchases traded at 121.00. In Nebraska on Thursday live and dressed purchases traded from 123.00-126.00 and at 198.00, respectively. In the Western Cornbelt on Thursday live and dressed purchases traded from 125.00- 126.00 and from 198.00-203.00, respectively.
The USDA is indicating cash trades last week for live cattle at 119.00 – 128.00 and at 195.00 – 205.00 on a dressed basis.
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 19, 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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