Walsh Trading Daily Insights
Commentary
June Lean Hogs surged from the opening bell. It made the low at 116.325 and making the high at 120.825, briefly going limit up and then dipping to settle at 119.825. The surprising limit up move took price past resistance at 119.90 with settlement just underneath it. Today at least, traders looked at the positive fundamentals with supply numbers down and summer around the corner as we are entering the buying period for the upcoming grilling season. We have the Quarterly Hogs and Pigs Report out next week and could traders be looking ahead at what it may say. If price can follow through to the upside, we could test resistance at 122.275. A fresh look and a thought that we rallied too fast and too high for the Monday session could see price consolidate within the Monday range.
The Pork Cutout Index increased and is at 104.48 as of 3/18/2022.
The Lean Hog Index increased and is at 101.36 as of 3/17/2022.
Estimated Slaughter for Monday is 478,000, which is above last week’s 466,000 and below last year’s 484,000. Friday’s slaughter was revised lower to 470,000. The estimated slaughter for the week (so far) is revised lower to 2,430,000, which is below last week’s 2,475,000 and last year’s 2,524,000.
May Feeder Cattle opened lower, traded to the session high at 167.20 and broke down to the low of the session. The low was at 165.35 and then price drifted the rest of the session to settle near the low at 165.75. Corn was strong all- session and Feeders were feeling the pain. The good thing about Monday’s weakness is that Feeders didn’t crash. The decline in Feeders took price to support at 165.775 with settlement and the low just below it. If price continues lower on Tuesday, we could test support at the 50-DMA at 164.15. The 100-DMA is just below it at 163.45. A reversal off the low could see price revisit the key level at 167.15.
The Feeder Cattle Index ticked higher and is at 154.93 as of 3/18/2022.
June Live Cattle continued its consolidation on Monday. It tried to rally early in the session, making a new high for the band at 137.75, but it couldn’t sustain the rally, quickly dropping and falling the rest of the session to the low at 136.15. It settled near the low at 136.35. The low of the band is at 134.75. The high is just below resistance at 137.875 and settlement was right at the 136.35 support level. If price can hold above 136.35, we could see a re-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 increased as choice cutouts rose 0.34 to 258.50 and select climbed 1.85 to 252.50. The choice/ select spread narrowed and is at 6.00 and the load count was 90.
Monday’s estimated slaughter is 119,000, which is below last week’s 125,000 and above last year’s 116,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been mostly inactive on very light demand in the Western Cornbelt. Not enough purchases for a market trend. Negotiated cash trading has been at a standstill in all other major feeding regions. Last week in the Southern Plains live purchases traded at 138.00. In Nebraska last week live and dressed purchases traded at 138.00 and 221.00, respectively. Last week in the Western Cornbelt live and dressed purchases traded from 140.00- 142.00 and at 222.00, respectively.
The USDA is indicating no cash trades for live cattle and at 220.00 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, March 24, 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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