Livestock Report

Ben DiCostanzoGeneral Commentary

Walsh Trading Daily Insights


October Lean Hogs opened lower, raced to the session high at 97.075 and reversed course, breaking down and trading to the session low at 93.20. It recovered a bit and settled at 94.125. The early rally failed yet again to overtake resistance at 97.30 and this time traders panicked and the market crashed. Cash trade was weaker on Monday and this could have been the spark for the selloff as the indices and the daily cutouts remain strong. The break down blew through support at 95.30 and tested the 93.50 support level. If support holds, we could test resistance at 95.30. Resistance is strong at 97.30. A break down below 93.50 could see price test support at 92.375.

The Pork Cutout Index increased and is at 124.16 as of 7/22/2022.

The Lean Hog Index increased and is at 118.22 as of 7/21/2022.

Estimated Slaughter for Monday is 450,000, which is above last week’s 449,000 and below last year’s 467,000. The estimated total for last week remains at 2,285,000, which is above last week’s 2,255,000 and below last year’s 2,325,000.

September Feeder Cattle is now the lead contract as its volume has exceeded the August contract. It opened lower and rallied to the session high at 184.25. It couldn’t maintain the momentum and turned south to the session low at 182.05. It settled nearby at 182.675. The early rally occurred as corn came off its overnight highs. The break down gathered steam as corn recovered and regained its overnight strength, in my opinion. The high is just below resistance at 184.375. The break down took price below the key level at 182.70. A failure from settlement could see futures test support at 180.80. a recovery from settlement could see price work its way to resistance at 184.375.

The Feeder Cattle Index decreased and is at 169.02 as of 7/22/2022.

October Live Cattle opened lower and broke down to the low of the day at 141.525. It turned around and rallied to the session high at 143.775. It consolidated and settled near the high at 143.35. The recovery off the low took price past the Friday high and approached resistance at 144.025. Settlement was strong and if bulls continue to press, we could see resistance tested at 144.025. A rally past resistance could see price work its way higher and approach resistance at 146.825. A failure from settlement could see price pull back towards support at 142.225. Support then comes in at 140.175.

Boxed beef cutouts were higher as choice cutouts increased 0.99 to 268.11 and select jumped 2.50 to 245.00. The choice/ select spread narrowed and is at 23.11 and the load count was 90.

Monday’s estimated slaughter is 124,000, which is below last week’s 125,000 and above last year’s 118,000. Saturday’s slaughter is expected to be 49,000, which is below last week’s 54,000 and last week’s 71,000. The estimated total for last week remains at 665,000, which is below last week’s 674,000 and above last year’s 655,000.

The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been at standstill in the Southern Plains and Nebraska. In the Western Cornbelt negotiated cash trading has been mostly inactive on very light demand. Not enough purchases for a market trend. Last week in the Southern Plains live purchases traded at 136.00. For the prior week live and dressed purchases traded from 139.00-143.50 and at 227.00, respectively. For the previous week in the Western Cornbelt live and dressed purchases traded from 141.00-145.00 and from 227.00-232.00.

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, July 28, 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.

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**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


Fax: 312.256.0109

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