Livestock Report

Ben DiCostanzo General Commentary Leave a Comment

Walsh Trading Daily Insights

Commentary

October Lean Hogs broke down right from the open making the high of the day on the open at 89.975. The decline took price down to 88.00 and it settled nearby at 88.10 The breakdown took price below support at 88.325 putting support at 87.10 and the 86.05 consolidation low in traders crosshairs. A reversal of fortune could take price up to resistance at 90.40. Cash market continues to leak lower as cutout prices and cash hgogs work there way lower.

The Pork Cutout Index decreased and is at 108.64 as of 9/03/2021.

The Lean Hog Index decreased and is at 100.06 as of 9/02/2021.

Estimated Slaughter for Tuesday is 481,000, which is above last week’s 479,000 and last year’s 468,000. The estimated total for the week (so far) is 487,000, which is below last week’s 950,000 and above last year’s 475,000.

October Feeder Cattle took another one to the chin and fell to a new low for the down move at 159.15. It bounced and settled at 160.05. The breakdown took price below support at 160.625 and puts the 157.92 – 157.30 support zone as the next target for bearish traders. If price can hold settlement, a test of resistance at 162.00 is possible.

The Feeder Cattle Index increased and is at 157.37 as of 9/06/2021.

October Live Cattle also was knocked down to its knees, trading down to the session low at 123.675 and settling just above the low at 163.75. The break down took price below support at 124.30 and puts 122.825 in jeopardy. With cutout prices declining, traders are likely thinking packers will not be aggressive in making purchases at higher prices, even with buying for a normal week. With stay-at-home benefits phased out, will consumers have the money to make purchases of beef? Will congress keep them going?  A breakdown below 122.825 could see the 121.90 support level tested. If price can hold settlement a test of resistance at 124.30 is possible.

Boxed beef cutouts were lower as choice cutouts decreased 1.23 to 335.19 and select declined 2.23 to 301.90. The choice/ select spread widened to 33.29 and the load count was 109.

Tuesday’s estimated slaughter is 121,000, which is even with last week and last year’s 120,000. The estimated total for the week (so far) is 124,000, which is below last week’s 238,000 and even with last year.

The USDA report LM_Ct131 states: So far for Tuesday negotiated has been at a standstill in all feeding regions. Last week in the Texas Panhandle live purchases traded at 124.00. In Kansas live purchases traded from 123.00-124.00. For the previous week in Nebraska live and dressed purchases traded from 125.00-126.00 and 200.00-203.00, respectively. In the Western Cornbelt live and dressed purchases traded from 125.00 -128.00 and 200.00-203.00, respectively.

The USDA is indicating no cash trades for live cattle and 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 9, 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.

Sign Up Now

**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

bdicostanzo@walshtrading.com

www.walshtrading.com

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.​

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.​

All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall not be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.

Leave a Reply

Your email address will not be published. Required fields are marked *