Walsh Trading Daily Insights
Commentary
April Lean Hogs gap opened higher, pulled back to close most of the gap then rallied the rest of the trading session. The gap is from the Wednesday high (91.40) to the Thursday low (91.475). The rally took price past resistance at 93.50 to the session high at 94.475. Price dipped at the end of the day and settlement was at 94.00. A failure from settlement could see price test support at 93.50. Support then comes in at the 200 DMA on the continuous chart at 91.975. If settlement holds, we could test resistance at 95.30.
The Pork Cutout Index increased and is at 91.80 as of 1/19/2022.
The Lean Hog Index ticked higher and is at 76.85 as of 1/18/2022.
Estimated Slaughter for Thursday is 457,000, which is below last week’s 461,000 and last year’s 498,000. The weekly estimated total is 1,777,000, which is below last week’s 1,795,000 and last year’s 1,917,000.
March Feeder Cattle opened higher and made the session high at 166.125. This is just above the 21 DMA (165.925) and it failed, breaking down to the low at 164.15 and settling at 164.95. The low took price past support at the rising 50 DMA at 164.225 and it held with the settlement above it. If settlement holds, we could see a re-test of resistance at the 21 DMA. Resistance then comes in at 167.15. A breakout above here could see price challenge resistance at the gap from 168.50 – 169.225. A failure from settlement could see price test support at 163.50. Support then comes in at 162.00.
The Feeder Cattle Index decreased and is at 161.30 as of 1/17/2022.
April Live Cattle consolidated within Wednesday’s breakout candle as cash continues to lag as slaughter remains in feeble territory. Wednesday made a new high at 143.775 and on Thursday price sagged, making the low at 142.65 and the high at 143.625. The high came in early in the session and the low around mid-session. It recovered into the settlement and settled in the middle tier of the range at 143.175. Resistance is at 144.025 and support is now at 142.25. Cash needs to show some strength in my opinion or we could range trade as traders wait for slaughter to recover.
Boxed beef cutouts were higher as choice cutouts increased 1.38 to 292.98 and select increased 1.75 to 282.18. The choice/ select spread narrowed to 10.80 and the load count was 129.
Thursday’s estimated slaughter is 116,000, which is above last week’s 114,000 and below last year’s 122,000. The estimated total for the week is 461,000, which is above last week’s 455,000 and below last year’s 473,000.
The USDA report LM_Ct131 states: So far for Thursday negotiated cash trading has been limited on light demand in Kansas, Nebraska and Western Cornbelt. In Kansas a few live purchases traded steady with Wednesday at 137.00. In Nebraska a few dressed purchases traded steady with Wednesday 218.00. The last live purchase market was on Wednesday with trades from 137.00-138.00. In the Western Cornbelt a few live purchases traded at 137.00. However, not enough for a full market trend. Tuesday saw dressed purchases trade at 218.00 and live purchases, last week, traded at 138.00. Thus far for Thursday in the Texas Panhandle negotiated cash trading has been at a standstill. The last reported market was on Wednesday with live purchases at 137.00.
The USDA is indicating cash trades for live cattle from 135.50 – 139.00 and from 217.00 – 218.00 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 Friday, January 21, 2022 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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