Walsh Trading Daily Insights
Commentary
October Lean Hogs broke down early and tested support at 92.375, making the low at 92.125. Price recovered and rallied, making the high by late morning at 95.00. This couldn’t quite challenge resistance at 95.30 and it pulled back, settling at 93.975. The price action gives us 2 bullish patterns with Monday’s trade. A Morning-star and a bullish engulfing candlestick pattern. Could this indicate a short-term bottom to the hog market? We’ll see!! If price can hold settlement, we could see price revisit resistance at 95.30. Resistance then comes in at 97.30. If price falls below support at 93.50, we could revisit support at 92.375.
The Pork Cutout Index decreased and is at 120.47 as of 8/19/2022.
The Lean Hog Index declined and is at 120.29 as of 8/18/2022.
Estimated Slaughter for Monday is 478,000, which is above last week’s 442,000 and last year’s 439,000.
October Feeder Cattle opened lower, made the session high at 186.90 and broke down to the low of the day at 185.675 by mid-morning. Price recovered and challenged the high, not quite making it and dipped lower, settling at 186.475. The high was just below resistance at 187.20 and the low dipped below support at 185.80. The session formed a Doji candlestick, indicating indecision in the market. A slightly bearish Cattle-on-Feed report and firm grain markets put some pressure on Feeders, but bearish sentiment waned on the positive test of support. A pullback from settlement could see price test support at 185.80. Support then comes in at 184.375. If price holds settlement, we could test resistance at 187.20. Resistance then comes in at 188.95.
The Feeder Cattle Index increased and is at 180.66 as of 8/19/2022.
October Live Cattle opened lower and traded to the session low at 144.20. This is just above support at 144.025 and bulls came back and rallied price to the session high at 145.025. Success didn’t last and it pulled back to settle at 144.50. It was a lackluster session as a slightly bearish Cattle-On-Feed report clashed with hopes for a continued higher trade in the cash market this week. The rally stopped short of resistance at 145.225 and puts cattle in the lower end of its 146.25 – 143.675 trading range. A rally past 145.225 could sees price test the high of the range, with resistance above it at 146.875. A break down from settlement could see the low of the range tested. Support then comes in at 142.225.
Boxed beef cutouts were higher as choice cutouts rose 0.24 to 264.52 and select rose 0.42 to 238.36. The choice/ select spread narrowed and is at 26.16 and the load count was 89.
Monday’s estimated slaughter is 125,000, which is above last week’s 121,000 and last year’s 117,000.
The USDA report LM_Ct131 states: So far for Monday negotiated cash trading has been at a 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 from 141.00-142.00. For the prior week in Nebraska live and dressed purchases traded from 146.00-148.50 and at 234.00, respectively. For the previous week in the Western Cornbelt live and dressed purchases traded from 148.00-150.00 and at 234.00, respectively.
The USDA is indicating cash trades for live cattle at 149.00 and nothing 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, August 25, 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
888.391.7894
Fax: 312.256.0109
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