Walsh Trading Daily Insights
Commentary
June Lean Hogs opened unchanged and established the main part of the trading day’s range in the 1st 15 minutes of the session. The high was at 117.625 and the low was at 115.00. The price action was stuck within this range until there was about 10 -15 minutes left in the day when someone rang the bell and all h..l broke loose. Price collapsed and traded down to 112.20 for the session low, coming back to settle at 114.35. The breakdown took price through support levels at the 21-DMA at 114.65 and 112.975. It puts Hogs in a tough position if it can’t reclaim the 21-DMA which is rising. If price can get above and hold the 21-DMA, we could see price test resistance at 115.925. Resistance then comes in at 117.20. A failure from settlement, could see price continue to work its way lower and re-test support at 112.975. Support then comes in at 111.675.
The Pork Cutout Index declined and is at 105.32 as of 4/04/2022.
The Lean Hog Index decreased and is at 102.41 as of 4/01/2022.
Estimated Slaughter for Tuesday is 480,000, which is above last weeks and last year’s 479,000. The estimated total for the week (so far) is 957,000 which is above last year’s 955,000 and last year’s 815,000.
May Feeder Cattle gap opened lower, made the session high at 161.975 and for the second day in a row, collapsed. It broke down all session, falling until the low was made at 158.075. It recovered a touch and settled at 159.00. The gap is from the Tuesday session high and the Monday low at 162.15. The collapse saw price open below the rising 200-DMA, now at 162.15 and never look up, trading through support at 160.625 to the session low. If settlement holds, Feeders could consolidate within the Tuesday range. A failure from settlement could see price test support at 157.30. Support then comes in at 156.075.
The Feeder Cattle Index decreased and is at 155.76 as of 4/04/2022.
June Live Cattle opened higher, up-ticked to the session high at 135.25, and then broke down the rest of the session to the low at 133.10. It settled just off the low at 133.325. The breakdown took price below the rising 200-DMA now at 133.475 and through the lower end of its 138.52 – 133.875 trading range. If price can’t get back into this range and above the 200-DMA, Cattle could be in trouble. If price fails at settlement, we could see price test support at 132.95. Support then comes in at 130.45. If price can hold settlement, we could see price test resistance at 134.55. Resistance then comes in at 136.35.
Boxed beef cutouts were higher as choice cutouts jumped 3.49 to 271.53 and select increased 1.20 to 262.90. The choice/ select spread widened and is at 8.63 and the load count was 123.
Tuesday’s estimated slaughter is 125,000, which is even with last week and above last year’s 120,000. The estimated total for the week (so far) is 246,000, which is above last week’s 244,000 and last year’s 225,000.
The USDA report LM_Ct131 states: So far for Tuesday in Nebraska negotiated cash trading and demand have been moderate. Compared to last week live and dressed purchases traded steady from 138.00-140.00 and at 222.00, respectively. In Kansas and Western Cornbelt negotiated cash trading has been slow on light demand. In Kansas not enough purchases for a market trend. Monday was the last reported market with live purchases at 138.00. In the Western Cornbelt, compared to last week, live purchases traded unevenly steady at 140.00. Not enough dressed purchases for a market trend. Last week dressed purchases traded at 222.00. Thus far for Tuesday in the Texas Panhandle and Colorado negotiated cash trading has been mostly inactive on light demand. Not enough purchases in these regions for a market trend. Monday was the last reported market in the Texas Panhandle with live purchases at 138.00. In Colorado on Monday a few live purchases traded at 138.00.
The USDA is indicating cash trades for live cattle from 136.00 – 140.00 and from 219.00 – 225.00 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, April 7, 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
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