Walsh Trading Daily Insights
Commentary
December Lean Hogs started the week off on a sour note, breaking down from the open and trading down to support at 83.325 making the low at 82.80. The high was at 85.20, below resistance at 85.325 and the declining 50 DMA at 85.425. The inability to take out resistance put the bears in charge, closing the 84.55 to 84.00 gap and settling below support at 83.10 as traders took some profits after last week’s strong rally. The settlement below support is concerning and a continued breakdown could see price test support at the rising 8 DMA now at 81.975 and the declining 21 DMA now at 81.125. Support then comes in at 80.45. If price can hold settlement, a re- test of resistance at 85.325 is possible.
The Pork Cutout Index increased and is at 112.89 as of 10/01/2021.
The Lean Hog Index down ticked and is at 93.39 as of 9/30/2021.
Estimated Slaughter for Monday is 481,000, which is above last week’s 478,000 and below last year’s 484,000. Friday’s slaughter was revised lower to 467,000. The estimated total for last week is 2,516,000, which is below last week’s 2,578,000 and last year’s 2,612,000.
November Feeder Cattle recovered from its breakdown candle from Thursday’s trade, coming all the way back and making the session high at 155.40. This above the Thursday high and resistance at 155.275. Settlement, however, was below this level at 155.025. If price can break out above the Monday high, we could see resistance tested at 156.075. Resistance then comes in at 157.30 – 157.92. A failure from settlement could see price test support at 154.25 and then 153.50.
The Feeder Cattle Index down ticked and is at 153.72 as of 9/30/2021. (not updated yet)
December Live Cattle opened higher, made the session low at 125.525 and surged, trading back above the 128.10 resistance level to the session high at 128.55. It settled below resistance at 128.05. A failure from settlement could see a pullback to support at 126.625. If price can push past the 128.10 resistance level, a test of resistance at 129.325 is possible.
Boxed beef cutouts were mixed as choice cutouts dropped 3.18 to 289.18 and select increased 0.32 to 265.16. The choice/ select spread narrowed to 24.02 and the load count was 103.
Monday’s estimated slaughter is 120,000, which is above last week’s 119,000 and last year’s 116,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been at a standstill in the Southern Plains and Nebraska. In Western Cornbelt negotiated cash trading has been mostly inactive on light demand. Not enough purchases for a market trend. Last week in the Texas Panhandle live purchases traded at 124.00. In Kansas live purchases traded from 122.00-124.00. In Nebraska live and dressed purchases traded mostly at 122.00 and 196.00, respectively. In the Western Cornbelt live and dressed purchases traded mostly at 122.00 and from 192.00-197.00, 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, October 7, 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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