Livestock Report

Ben DiCostanzoGeneral Commentary

Walsh Trading Daily Insights


October Lean Hogs opened higher, made the session low at 94.00 and rallied the rest of the session to the high at 96.525. It settled just off the high at 96.45. It was a welcomed rally after Tuesday’s early beat down to 92.425. The low was just above support at 92.375. The Wednesday rally was nice to see, but it fell short of resistance at the Monday high at 97.075 and the key level 97.30. Cash markets are staying strong as cutouts and cash hogs continue to remain firm. Demand remains strong for pork, both domestically and for exports. Daily cutout prices are staying near its highs despite worries about recessionary forces putting a damper on demand, indicating demand is holding. Exports are out before the Thursday open and could have an effect on futures. If price fails from settlement, we could revisit support at 95.30. Support then comes in at 93.50 and 92.375. If we can hold above settlement, price can revisit the Monday high and test resistance at 97.30. Resistance then comes in at 98.475.

The Pork Cutout Index increased and is at 125.85 as of 7/26/2022.

The Lean Hog Index increased and is at 119.48as of 7/25/2022.

Estimated Slaughter for Wednesday is 468,000, which is above last week’s 459,000 and last year’s 467,000. The estimated total for the week is 1,385,000, which is above last week’s 1,368,000 and below last year’s 1,406,000.

September Feeder Cattle opened higher, made the session low at 179.75 and never looked back. It rallied the rest of the session to the high at 182.225. It settled near the high at 181.85. The rally closed the gap created from the Monday low at 182.05 to the Tuesday high at 182.00. It also formed a bullish outside day candlestick, But the rally couldn’t challenge resistance at 182.70 and it dipped into the close settling below the gap. If price can’t hold settlement, we could see futures test support at 180.80. Support then comes in at 178.95. If price can follow-through and best resistance at 182.70, we could see price work its way to resistance at 184.375.

The Feeder Cattle Index increased and is at 170.64 as of 7/26/2022.

October Live Cattle opened higher and traded to the high of the day at 142.70. It turned around and fell to the session low at 141.875. It consolidated the rest of the session and settled at 142.325. It was a ho-hum session as cash prices have been in the same trading range for weeks and with October the lead contract, it is getting a pass and not breaking down to the lowest price in the range. The August contract has been tied to the lower levels of the 135.00 – 150.00 range of the cash market. It is hoped, anticipated, expected, hoped, wished that the South will be seeing higher prices going into the fall. Packers have been highly successful in lowering their average price during these few weeks and this week isn’t any different. If cash doesn’t improve in the next few weeks, you may see October drift to the lowest levels in the cash market. The break down took price below support at 142.225, while settlement was just above it. If settlement holds, price could work its way higher and approach resistance at 144.025. A failure from 142.225 could see price pull back towards support at 140.175.

Boxed beef cutouts were lower as choice cutouts decreased 1.12 to 267.99 and select dropped 2.07 to 241.81. The choice/ select spread widened and is at 26.18 and the load count was 146.

Wednesday’s estimated slaughter is 125,000, which is above last week and above last year’s 120,000. The estimated total for the week is 374,000, which is even with last week’s 250,000 and above last year’s 357,000.

The USDA report LM_Ct131 states: So far for Wednesday in Nebraska negotiated cash trading has been moderate with moderate demand. Compared to last week live purchases traded 1.00-5.50 lower at 138.00 and dressed purchases traded 2.00 lower at 225.00. In the Western Cornbelt negotiated cash trading has been limited on light demand. For the previous week live and dressed purchases traded from 141.00- 145.00 and from 227.00-232.00, respectively. In the Southern Plains negotiated cash trading has been mostly inactive on very light demand. Not enough purchases for a market trend. Tuesday was the last reported market with live purchases at 135.00.

The USDA is indicating cash trades for live cattle from 135.00 – 145.00 and from 213.00 230.00 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, 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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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163


Fax: 312.256.0109

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