Walsh Trading Daily Insights
Commentary
April Lean Hogs continued trading within its consolidation band. April Hogs have consolidated between 103.575 and 99.825 since making the low at 98.475 on March 7. Price is still reacting to the head and shoulders top formation which was activated on March 4th on the trendline breakdown. The price objective for this pattern is down at 91.875. Tuesday’s range was from 102.725 to 101.525 with settlement at 102.40. Settlement was above the key level at 101.975 and this must hold in my opinion or we could see price fall back to support at 100.075. A failure from there could see price move lower to test the March 7th low. This low is right at the 98.475 support level. A breakout above the 103.575 consolidation high could take price up to the next resistance level at 104.35. The upward sloping head and shoulders trendline resistance is next at 105.225. There is a gap from the March 3rd low at 105.05 and the March 4th high at 104.25.
The Pork Cutout Index decreased and is at 104.54 as of 3/14/2022.
The Lean Hog Index ticked higher and is at 100.85 as of 3/10/2022.
Estimated Slaughter for Tuesday is 479,000, which is below last week’s 480,000 and last year’s 494,000. Monday’s slaughter was revised lower to 466,000. The estimated slaughter for the week (so far) is 945,000, which is below last week’s 947,000 and last year’s 976,000.
April Feeder Cattle opened higher, traded to the session high at 164.075 and crashed. The high was just below resistance at the declining 50-DMA now at 164.375 as price challenged the 100-DMA at 163.25, the 21-DMA at 163.35 and the key level at 163.50. This was too difficult to overcome as corn prices rebounded off its low and grinded higher through the day. The breakdown took price below support at 162.00 and just below the rising 200-DMA now at 161.20 to the low at 161.00. The 200-DMA held and Feeders rallied to settle at 162.60. If Feeders can rally past the 100-DMA, we could see a re-test of the declining 50-DMA. Resistance then comes in at 165.775. A failure below support at 162.00 could see price test support at the 200-DMA and then 160.625.
The Feeder Cattle Index increased and is at 152.81 as of 3/14/2022.
June Live Cattle opened higher, made the low at 135.625 and grinded higher the rest of the session making the high at 136.875. It settled near the high at 136.80. The rally took price just past resistance at 136.35 and today it was able to settle above it. If price can hold above 136.35, we could see a test of resistance at 137.875. Resistance then comes in at 138.60. A breakdown from 136.35 could see price test support at 134.55.
Boxed beef cutouts were mixed as choice cutouts rose 2.39 to 257.90 and select decreased 1.40 to 248.84. The choice/ select spread widened and is at 9.06 and the load count was 135.
Tuesday’s estimated slaughter is 125,000, which is even with last week and above last year’s 121,000. The weekly estimated total (so far) is 250,000, which is even with last week and above last year’s 229,000.
The USDA report LM_Ct131 states: So far for Tuesday negotiated cash trading has been at a standstill in all feeding regions. Last week in the Southern Plains and Nebraska live purchases traded at 138.00 and dressed purchases, in Nebraska, traded at 220.00. Last week in the Western Cornbelt live purchases traded from 138.00- 140.00 and dressed purchases traded from 219.00-222.00.
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, March 17, 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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