Walsh Trading Daily Insights
Commentary
December Lean Hogs continued lower on Tuesday, trading to the session low at 81.575 and closing below the 83.325 support level at 82.55. The high was 83.525. The inability to hold support at 83.325 keeps the bears in charge, in my opinion. More follow-through to the downside could see the declining 21 DMA now at 80.775 and the 80.45 support level tested. If price can hold settlement, a re- test of resistance at 83.325 is possible. Resistance then comes in at 85.325.
The Pork Cutout Index increased and is at 112.98 as of 10/04/2021.
The Lean Hog Index increased and is at 94.05 as of 10/01/2021.
Estimated Slaughter for Tuesday is 476,000, which is above last week’s 471,000 and below last year’s 490,000. Monday’s slaughter was revised lower to 464,000. The estimated total for the week (so far) is 940,000, which is below last week’s 949,000 and last year’s 974,000.
November Feeder Cattle opened higher, made the session low at 155.15 and rallied to the session high at 157.925. After making the high, price consolidated and then settled at 156.875. The rally stalled at the top end of the 157.30 – 157.92 resistance zone and put Feeders back in the 159.725 – 154.775 trading range on my continuous chart. If price can hold settlement, we could see resistance tested at the Tuesday high and then the rising 100 DMA now at 158.325. A failure from settlement could see price test support at 156.075. Support then comes in at 155.275.
The Feeder Cattle Index increased and is at 152.79 as of 10/04/2021.
December Live Cattle is back to trading around the key level at 128.10, making the session high at 128.75 and the low 127.60. Settlement was at 127.85. Cash trading is not supporting the rally in futures, as the week has started out in the lower end of its trading range so price has paused in the futures markets. A failure from settlement could see a pullback to support at 126.625. Support then comes in at 125.80. 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 decreased 1.47 to 287.71 and select increased 2.62 to 267.78. The choice/ select spread narrowed to 19.93 and the load count was 171.
Tuesday’s estimated slaughter is 122,000, which is above last week’s 117,000 and last year’s 120,000. The estimated total (so far) for the week is 242,000, which is above last week’s and last year’s 236,000.
The USDA report LM_Ct131 states: Thus far for Tuesday in all regions negotiated cash trading has been mostly inactive with 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 cash trades for live cattle from 122.00 – 124.15 and 192.00 – 196.00 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, 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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