Walsh Trading Daily Insights
Commentary
June Lean Hogs opened lower and kept on going down. It made the high at 110.50 and broke down to the low at 107.825. The low is just below support at 107.925 and buying came back in vogue as price grinded higher the rest of the session to settle at 108.975. Settlement was below the key level at 109.85 and this keeps pressure on the market, in my opinion. A failure from settlement could see price revisit the Monday low. Support then comes in at 106.85. If price can reclaim the 109.85 level, we could test the Monday high. Resistance then comes in at 111.675. Cash markets have been grinding higher as summer demand is here, so futures could be supported if cash prices remain firm.
The Pork Cutout Index increased and is at 109.09 as of 6/03/2022.
The Lean Hog Index increased and is at 106.05 as of 6/02/2022.
Estimated Slaughter for Monday is 475,000, which is above last week’s 2,000 and below last year’s 479,000.
August Feeder Cattle opened lower as corn was strong. Feeders surged to the session high as corn broke down to its session low. A reversal in corn turned Feeders upside down and it traded lower the rest of the session to the low at 171.70. It settled near the low at 171.975. Cash prices surged, but Feeders is watching corn and reacting to its ups and downs. If corn reverses direction again and turns lower, we could see a strong rally in the Feeder Cattle market. Settlement was just below support at 172.00 and in my opinion is the key level for trade on Tuesday. A rally above 172.00 could see price test resistance at 173.325 and then the Monday high. Resistance then comes in at 175.70. A break down from settlement could see support tested at 169.95.
The Feeder Cattle Index surged and is at 158.53 as of 6/03/2022.
August Live Cattle continued its trading in the upper end of its 134.875 – 129.975 trading range. The Monday high came early at 134.75 and the low at the end of the session at 132.775. Settlement was near the low at 132.90. Settlement was just below support at 132.95. A failure from settlement could see price test support at 130.45 and then the low of the trading range. If price can hold settlement, we could see another rally to the top of the trading range.
Boxed beef cutouts were mixed as choice cutouts decreased 0.77 to 266.65 and select increased 0.72 to 249.63. The choice/ select spread narrowed and is at 17.09 and the load count was 131.
Monday’s estimated slaughter is 125,000, which is above last week’s 3,000 and last year’s 117,000.
The USDA report LM_Ct131 states: Thus far for Monday negotiated cash trading has been at a standstill in all feeding regions. Last week in the Southern Plains live purchases traded at 135.00. For the prior week in Nebraska live and dressed purchases traded from 139.00-140.00 and at 222.00, respectively. For the previous week live and dressed purchases traded from 140.00-141.00 and at 222.00, 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, June 09, 2022 at 2:00 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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