Walsh Trading Daily Insights
Commentary
December Lean Hogs surged on Monday, trading up limit and settling at the limit price. Settlement was at 81.55. The limit move came about as the Quarterly Hogs and Pigs Report was regarded by traders as extremely bullish. Hog inventory came in way below expectations and bullish traders pounced. Limits will be expanded on Tuesday to 7 handles. The rally was a new high for the December contract since taking over as the lead contract and it settled well above resistance at 80.45. If price can follow through higher, a test of resistance at 83.325 is possible. Resistance then comes in at 85.325. A failure from settlement could see consolidation within the Monday range.
The Pork Cutout Index increased and is at 105.48 as of 9/24/2021.
The Lean Hog Index decreased and is at 91.47 as of 9/23/2021.
Estimated Slaughter for Monday is 478,000, which is above last week’s 463,000 and below last year’s 490,000.
November Feeder Cattle collapsed as higher corn prices and a bearish Cattle on Feed report saw bears take control and trample the complex. The pounding took price past support at 155.275 to the session low at 155.125. It settled just above support at 155.575. Follow through to the downside could see price test support at 154.25 and then 153.50. If price can hold settlement, a test of resistance at 156.75 is possible. Resistance then comes in at 157.30 – 157.92.
The Feeder Cattle Index increased and is at 154.87 as of 9/24/2021.
December Live Cattle continued its trading around the key level at 128.10. The high was at 128.95 and the low was at 127.225. It settled at 127.80. Cash was at a standstill and producers are hoping for steady trade this week. If cash continues to limp by, futures could stay passive. Any unexpected breakdown in cash could drive futures lower. A breakdown below the low could see the 126.625 support level tested. Support then comes in at 125.80. If price can hold settlement, a move toward resistance at 130.45 is possible. Futures need to see some positive price action in the cash market to get traders excited and get price out of its doldrums.
Boxed beef cutouts were lower as choice cutouts decreased 0.62 to 302.70 and select dipped 0.15 to 274.38. The choice/ select spread narrowed to 28.32 and the load count was 109.
Monday’s estimated slaughter is 119,000, which is even with last week and above last year’s 116,000.
The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been at a standstill in all major feeding regions. Last week in the Texas Panhandle live purchases traded at 124.00. In Kansas last week live purchases traded from 123.00-124.00. In Nebraska live and dressed purchases traded at 124.00 and 198.00, respectively. In the Western Cornbelt live and dressed purchases traded from 122.00- 124.00 and from 193.00-198.00, 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 30, 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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