Walsh Trading Daily Insights
Commentary
June Lean Hogs opened unchanged and broke down to the session low at 125.025. Price rebounded and traded to a new high for the up move, reaching 126.875. The rally wasn’t sustained and it pulled back to settle in the middle of the range at 126.05. It formed a spinning top candlestick indicating indecision at the new high. If price can hold above settlement, we could test resistance at 127.70. A failure from settlement could see price test the low and then move towards support at 124.00.
The Pork Cutout Index increased and is at 106.39 as of 3/25/2022.
The Lean Hog Index increased and is at 102.24 as of 3/24/2022.
Estimated Slaughter for Monday is 476,000, which is above last week’s 468,000 and below last year’s 483,000.
May Feeder Cattle opened higher and then broke down to the low of the session at 164.70 as traders reacted early to the bearish cattle on feed report. With corn trading in negative territory, the bulls came back and took price to the session high at 166.15. The rally failed to hold and price retested the session lows and settled near the low at 165.075. Price settled below the key level at 165.775 and if settlement fails, we could see price return to the 50-DMA at 164.10. The 100-DMA is nearby at 163.925. A recovery from 165.775 could see price move towards resistance at 167.175.
The Feeder Cattle Index increased and is at 155.11 as of 3/25/2022.
June Live Cattle continued its consolidation on Tuesday as a bearish Cattle on Feed report led to a lower open, the high being made just after at 137.15 and a breakdown taking price below support at 136.35 to the session low at 135.90. This put cattle in the middle of its 137.75 – 134.075 trading range after Friday’s trip to the high end of the trading range. The market was able to recover off the low and settled at 136.775. The recovery keeps price above the key level at 136.35. If price can hold settlement, 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 were higher as choice cutouts rose 1.23 to 263.87 and select surged 4.18 to 256.32. The choice/ select spread narrowed and is at 7.55 and the load count was 71.
Monday’s estimated slaughter is 124,000, which is above last week’s 119,000 and last year’s 117,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been at a standstill in all regions. Last week in the Southern Plains and Nebraska live purchases traded at 138.00, and dressed purchases, in Nebraska, traded at 221.00. For the prior week in the Western Cornbelt live and dressed purchases ranged from 138.00-142.00 and 221.00-225.00, respectively.
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 31, 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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