Walsh Trading Daily Insights
Commentary
June Lean Hogs opened at the low of the day (107.75) and then surged to the session high at 110.125. All in the first 15 minutes of trade. It spent the rest of the session in sleep mode, consolidating within the high and the low. The low was below the Monday low and below support at 107.925, while the high was under the Monday high and above resistance at 109.85. Settlement was below resistance at 109.275 and this continues to keep pressure on the market, in my opinion. A failure from settlement could see price revisit the Tuesday 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 109.58 as of 6/06/2022.
The Lean Hog Index increased and is at 107.34 as of 6/03/2022.
Estimated Slaughter for Tuesday is 479,000, which is above last week’s 467,000 and below last year’s 483,000. The estimated total for the week (so far) is 954,000, which is above last week’s 469,000 and below last year’s 962,000.
August Feeder Cattle opened lower as corn was strong. It traded to the session low at 171.00 and then reversed course and traded higher the rest of the session to the high at 172.675. It settled near the high at 172.45. Corn remained strong and Feeders didn’t care as the Feeder Index jumped after Monday’s close and traders believe cash will strengthen this week to justify the high futures price. Well, the index dipped lower this afternoon so if corn rallies will we get the same response as today?? Settlement was above the key level at 172.00 and in my opinion is the key level for trade on Wednesday. If settlement holds, we could see price test resistance at 173.325 and then the Monday high. Resistance then comes in at 175.70. A break down from 172.00 could see support tested at 169.95.
The Feeder Cattle Index down ticked and is at 158.49 as of 6/06/2022.
August Live Cattle continued its trading in the upper end of its 134.875 – 129.975 trading range. This time the low came early at 132.70 and the high came in at the end of the session at 134.325. This time settlement was near the high at 134.125. Settlement and the high were just below resistance at 134.55. A failure from settlement could see price test support at 132.95. Support then comes in 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. Resistance then comes in at the 200-DMA at 135.40.
Boxed beef cutouts were mixed as choice cutouts increased 1.84 to 271.42 and select decreased 1.53 to 249.56. The choice/ select spread widened and is at 21.86 and the load count was 137.
Tuesday’s estimated slaughter is 126,000, which is even with last week and above last year’s 121,000. The estimated total for the week (so far) is 251,000, which is above last week’s 129,000 and last year’s 238,000.
The USDA report LM_Ct131 states: So far for Tuesday negotiated cash trading has been limited on light demand in the Western Cornbelt. A few live purchases traded at 141.00. In the Southern Plains and Nebraska negotiated cash trading has been at a standstill. Not enough purchases in any region for a market trend. 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 in the Western Cornbelt live and dressed purchases traded from 140.00-141.00 and at 222.00, respectively.
The USDA is indicating cash trades for live cattle at 141.00 and from 222.00 to 227.00 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, 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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