Walsh Trading Daily Insights
Commentary
December Lean Hogs broke down to support early in the trading session, trading to the session low at 80.55. The break down to the low took price to the declining 21 DMA now at 80.475 and the 80.45 support level and this combo provided bulls with an opportunity to get back in the game causing Hogs to reverse course, trading higher the remainder of the session to the high at 82.15. It settled near the high at 81.725, forming a Doji candlestick in the process. This indicates indecision in the market and the Export Sales Report is out before the open and could be the key to the Thursday price action in my opinion. A weak report could see price revisit support and a break down below support could see price test the 79.80 support level. A strong sales report could see price re- test of resistance at 83.325. Resistance then comes in at 85.325.
The Pork Cutout Index ticked higher and is at 113.01 as of 10/05/2021.
The Lean Hog Index ticked higher and is at 94.11 as of 10/04/2021.
Estimated Slaughter for Wednesday is 478,000, which is above last week’s 464,000 and below last year’s 491,000. The estimated total for the week (so far) is 1,418,000, which is above last week’s 1,413,000 and below last year’s 1,465,000.
November Feeder Cattle opened weaker, trading down to the session low at 155.65 before reversing course and rallying to the session high at 158.45. It settled at 158.125. The rally took price past the 157.30 – 157.92 resistance zone and right at the next level of resistance at the rising 100 DMA. The 100 DMA is now at 158.40. If price can get past the 100 DMA, we could see resistance tested at the September 23 high at 159.725 and then 160.625. A failure from 157.30 – 157.92 could see price test support at 156.075. Support then comes in at 155.275.
The Feeder Cattle Index ticked higher and is at 152.88 as of 10/06/2021.
December Live Cattle continued its trading around the key level at 128.10, making the session high at 128.70 and the low 127.125. This time settlement was above it at 128.225. A failure from 128.10 could see a pullback to support at 126.625. Support then comes in at 125.80. If price can hold settlement, a test of resistance at 129.325 is possible. Resistance then comes in at 130.45.
Boxed beef cutouts were lower as choice cutouts decreased 1.09 to 286.62 and select collapsed 4.87 to 262.91. The choice/ select spread widened to 23.71 and the load count was 157.
Wednesday’s estimated slaughter is 121,000, which is above last week’s 116,000 and last year’s 119,000. The estimated total (so far) for the week is 363,000, which is above last week’s 352,000 and last year’s 355,000.
The USDA report LM_Ct131 states: Thus far for Wednesday in the Southern Plains and Nebraska negotiated cash trading has been slow with moderate demand. In the Texas Panhandle live purchases traded steady at 124.00 when compared to last week. In Kansas live purchases traded steady to 2.00 higher at 124.00 when compared to the prior week. In Nebraska live purchases traded steady to 2.00 higher from 122.00- 124.00 and dressed purchases traded steady at 196.00 when compared to the previous week. So far for Wednesday in the Western Cornbelt negotiated cash trading has been limited on light demand. A few dressed purchases traded at 196.00. Not enough for a market trend. Last week 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 – 124.25 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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