Walsh Trading Daily Insights
Commentary
December Lean Hogs continued its consolidation around the key level at 75.60. It made the high at 76.20 and the low at 75.125 with settlement just above it at 75.80. It formed an inside candlestick as the Monday range sat inside the Friday range. December will be losing its status as the lead contract real soon as the February volume is just about ready to overtake the December volume. December will likely stay near the Lean Hog Index going forward. A rally above the Monday high could see price test resistance at 76.75. A failure from the 75.60 key level could see price revisit support at 74.25. Support then comes in at 73.325.
The Pork Cutout Index decreased and is at 93.68 as of 11/12/2021.
The Lean Hog Index decreased and is at 76.68 as of 11/11/2021.
Estimated Slaughter for Monday is 486,000, which is above last week’s 467,000 and last year’s 480,000.
January Feeder Cattle tested support at the 157.92 – 157.30 support zone in the first 5 minutes of the day, trading to the session low at 156.875. Price rejected the low and traded higher the rest of the session, making the high at the end of the day at 158.75. Settlement was nearby at 158.475. It formed an inside candlestick and is in the middle of the 160.625 – 156.80 trading range. Price is attempting to climb the moving average hurdle from the short-term MA’s (8 DMA – 158.875 and 13 DMA – 157.975) to the intermediate term (21 DMA – 158.525 and 50 DMA 158.25) to the long term 100 DMA at 160.05. A rally past the Monday high could see price test the 100 DMA and then resistance at 160.625. A failure from settlement could see price push below support at the 157.92 – 157.30 zone and test support at 156.075.
The Feeder Cattle Index increased and is at 155.43 as of 11/12/2021.
February Live Cattle is now the lead contract as its volume has overtaken the December volume. It made the session low in the first 5 minutes of the session at 135.50. It rallied to the high at 136.675 and then consolidated its gains the rest of the session and settled at 136.325. Settlement is right next to resistance at 136.35. If price can over take the Monday high, we could see price move towards resistance at 137.875. A failure from settlement could see price the Monday low. A breakdown below the Monday low could see price move towards support at 134.55.
Boxed beef cutouts were lower as choice cutouts decreased 1.10 to 283.20 and select decreased 2.25 to 267.28. The choice/ select spread widened to 15.92 and the load count was 112.
Monday’s estimated slaughter is 121,000, which even with last week and above last year’s 120,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading in the Southern Plains and Colorado has been at a standstill. In Nebraska and Western Cornbelt negotiated cash trading has been mostly inactive with very light demand. Not enough purchases for a market trend. Last week in the Southern Plains, Nebraska and Colorado live purchases traded at 132.00, and dressed purchases, in Nebraska, traded at 207.00. For the prior week in the Western Cornbelt live and dressed purchases traded from 130.00-132.00 and at 207.00, respectively.
The USDA is indicating no cash trades for live cattle and from 206.00 – 208.00 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, November 18, 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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