; Application INI file
Walsh Trading Daily Insights
Commentary
October Lean Hogs opened lower, made the session high at 89.20 and then traded down the rest of the session to the low at 86.60. Disappointing exports, even though they were up from the previous week created negative sentiment in the price action as Hogs couldn’t rally past the August 16th high at 89.30 and fell below the declining 21 DMA (88.67) and the 88.325 support level. The selling momentum gathered steam and took price below support at 87.10 closing the gap from 86.875 to 87.25 and settling below support at 86.925. A breakdown from the low could see support tested at 85.325. If price can rally above resistance at 87.10, price could test resistance again.
The Pork Cutout Index decreased and is at 120.71 as of 8/18/2021.
The Lean Hog Index decreased and is at 109.77 as of 8/17/2021.
Estimated Slaughter for Thursday is 478,000, which is above last week’s 465,000 and even with last year. The estimated total for the week (so far) is 1,905,000, which is higher than last week’s 1,867,000 ad below last year’s 1,921,000.
Pork Exports: Net sales of 20,000 MT reported for 2021 were up 37 percent from the previous week, but down 31 percent from the prior 4-week average. Increases primarily for Mexico (6,900 MT, including decreases of 700 MT), Japan (3,100 MT, including decreases of 300 MT), Colombia (3,000 MT, including decreases of 200 MT), Canada (2,300 MT, including decreases of 700 MT), and South Korea (1,500 MT, including decreases of 100 MT), were offset by reductions for Australia (200 MT). Exports of 28,700 MT were up 4 percent from the previous week, but down 2 percent from the prior 4-week average. The destinations were primarily to Mexico (13,500 MT), China (4,500 MT), Japan (4,300 MT), Canada (1,600 MT), and Colombia (1,400 MT).
September Feeder Cattle opened lower and traded down to support at 162.00, making the low just above it at 162.025 and then rallying to the session high at 163.20. It settled nearby at 162.90. Feeder Cattle once again couldn’t rally with weaker corn. It once again couldn’t break out above resistance at 163.50, unable to take advantage of Wednesday’s bullish price action. It continues its sideways advance. If Feeders can take out resistance at 163.50, a test of resistance at 165.775 is possible. A failure from settlement could once again take price down to the 162.00 support level. Support then comes in at 160.625.
The Feeder Cattle Index increased and is at 155.42 as of 8/18/2021.
October Live Cattle once again spun its wheels around the key level at 128.10. It made the high at 128.725 and the low at 127.80 and settled at 128.15, keeping the cattle market in consolidation mode. A break out above the high could see price test the July 27th high at 129.875 and resistance at 130.45 is next. A failure below support at 128.10 could see price breakdown to support at 126.625. Support then comes in at 125.80.
Boxed beef cutouts were higher as choice cutouts increased 1.55 to 341.63 and select surged 6.61 to 316.41. The choice/ select spread narrowed to 25.22 and the load count was 75.
Thursday’s estimated slaughter is 119,000, which is above last week’s 116,000 and below last year’s 120,000. The estimated total for the week (so far) is 479,000, which is above last week’s 462,000 and last year’s 470,000.
Beef Exports: Net sales of 11,100 MT reported for 2021 were down 18 percent from the previous week and 42 percent from the prior 4-week average. Increases primarily for Japan (2,800 MT, including decreases of 400 MT), South Korea (2,800 MT, including decreases of 400 MT), China (1,800 MT, including decreases of 300 MT), Taiwan (900 MT, including decreases of 100 MT), and Mexico (600 MT, including decreases of 100 MT), were offset by reductions for Colombia (100 MT). Exports of 19,700 MT were up 6 percent from the previous week, but down 1 percent from the prior 4-week average. The destinations were primarily to South Korea (5,600 MT), Japan (4,700 MT), China (4,200 MT), Mexico (1,200 MT), and Taiwan (1,100 MT).
The USDA report LM_Ct131 states: Thus far for Thursday in the Southern Plains negotiated cash trading has been slow on light demand. Compared to last week live purchases traded mostly 1.00 higher at 122.00, with a light test noted. So far for Thursday in Nebraska and Western Cornbelt negotiated cash trading has been limited on light demand. A few live purchases traded at 126.00 in Nebraska. However, not enough purchases in either region for a full market trend. Wednesday was the last fully reported market in Nebraska and Western Cornbelt. In Nebraska live and dressed purchases traded from 125.00- 127.00 and at mostly 200.00, respectively. In the Western Cornbelt live and dressed purchases traded at 127.00 and mostly 200.00, respectively.
The USDA is indicating cash trades for live cattle at 121.00 – 129.50 and at 197.00 – 205.00 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 Friday, August 20, 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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