Walsh Trading Daily Insights
Commentary
October Lean Hogs continued its sideways trade on Wednesday, this time rallying to resistance after breaking down the past two sessions. Hogs have now established a new trading range with 91.425 as the high and 88.325 as the low. Wednesday’s rally took price past resistance at 90.40 to the high at 90.90. It pulled back and settled under resistance at 90.15. The low was at 89.325. Thursday morning gives us the Export Sales report before the open and this will determine, in my opinion the direction for trade on Thursday. If Hogs can hold settlement, a test of resistance at 90.40 is possible. A breakout above 90.40 could see the 91.425 high and the rising 200 DMA (91.57) tested. A failure below settlement could see price test support at 88.325 and then 87.10.
The Pork Cutout Index decreased and is at 112.21 as of 8/31/2021.
The Lean Hog Index increased and is at 103.61as of 8/30/2021.
Estimated Slaughter for Wednesday is 479,000, which is above last week’s 473,000 and last year’s 476,000. The estimated total for the week (so far) is 1,429,000, which is above last week’s 1,384,000 and last year’s 1,419,000.
October Feeder Cattle continued its consolidation between resistance at 169.95 and support at 167.125 as trade was once again lackluster, in my opinion. It made the high at 169.25 and the low at 167.275. Settlement was at 168.05. Today’s price action formed an inside candlestick. A failure below support could see a test of support at 165.80. If price can hold settlement, a re-test of resistance at 169.95 is possible. Resistance then comes in at 172.00.
The Feeder Cattle Index decreased and is at 158.35 as of 8/31/2021.
October Live Cattle made a new low for the down move, trading down to 126.525 for the session low. It was a choppy trading session, making the low early and then rallying to the session high at 128.175 by mid-morning and then challenging the low by mid-session. It bounced into the end of the day and settled at 127.575. The low was just below support at 126.625 and the high just above resistance at 128.10. Cash traded today with the fedcattleexchange.com auction trading from 122.00 to 124.25 and the range so far from 122.00 to 127.50 for the day. Futures need to see strength in the cash market in my opinion or it could range trade. A breakdown from settlement could see support revisited at 126.625. A breakdown below here could see the 125.80 support level tested. If price can hold settlement a re-test of resistance at 128.10 is possible.
Boxed beef cutouts were lower as choice cutouts decreased 3.66 to 338.45 and select declined 4.46 to 307.57. The choice/ select spread widened to 30.88 and the load count was 104.
Wednesday’s estimated slaughter is 119,000, which is above last week’s 113,000 and last year’s 116,000. The estimated total for the week (so far) is 357,000, which is above last week’s 349,000 and last year’s 356,000.
The USDA report LM_Ct131 states: Thus far for Wednesday negotiated cash trading has been slow on light demand in all major feeding regions with a few dressed purchases in Nebraska at 203.00, however not enough purchases in any region for a full market trend. Last week in the Texas Panhandle live purchases traded from 122.00- 123.00. In Kansas last week, live purchases traded at 123.00. In Nebraska and the Western Cornbelt last week live and dressed purchases traded at 128.00 and from 202.00-208.00, respectively.
The USDA is indicating cash trades for live cattle from 122.00 – 128.00 and 197.00 – 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, September 2, 2021 at 3:00 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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