Walsh Trading Daily Insights
Commentary
October Lean Hogs made a new low for the down move, trading to 89.575 for the session low. The market found support here and rallied. It made the high at 91.25 and settled near the high at 91.10. With the Labor Day holiday behind us, traders came back into the market looking at a severely discounted futures price and bought the futures. If price can hold settlement, we could see price revisit resistance at 92.375. Resistance then comes in at 93.50. If settlement fails, we could revisit support at 90.40 and then the Tuesday low. Support then comes in at 88.325.
The Pork Cutout Index up-ticked and is at 102.37 as of 9/02/2022.
The Lean Hog Index decreased and is at 104.74 as of 9/01/2022.
Estimated Slaughter for Tuesday is 483,000, which is above last week’s 480,000 and last year’s 471,000. The estimated total for the week (so far) is 485,000, which is below last week’s 960,000 and above last year’s 478,000.
October Feeder Cattle broke out above resistance at 185.80 early in the trading session, making the high at 187.00. The rally occurred as corn opened weaker inspiring bulls. The rally stalled just below resistance at 187.20 with price falling back to support as corn prices recovered and rallied the rest of its session. Feeders held its own settling above support at 186.10. If price holds settlement, we could re-test resistance at 187.20. Resistance then comes in at 188.95. If price falls below support, we could pull-back and test support at 184.375. Support then comes in at 182.70.
The Feeder Cattle Index up-ticked and is at 183.04 as of 8/30/2022.
October Live Cattle rallied on Tuesday as traders are expecting packers to be more aggressive this week in their purchases of cattle. Futures tested resistance at 145.225, making the high just above it at 145.40 and then dipped to settle below resistance at 145.05. The low was at 144.55. Trade is in the upper end of its 146.25 – 142.275 trading range. A rally past 145.225 could see price test the high of the range, with resistance above it at 146.875. A break down from the Tuesday low could see support tested at 144.025. Support then comes in at 142.225.
Boxed beef cutouts were higher as choice cutouts increased 1.05 to 260.47 and select increased 0.72 to 239.30. The choice/ select spread widened and is at 21.17 and the load count was 125.
Tuesday’s estimated slaughter is 127,000, which is above last week’s 126,000 and last year’s 119,000. The estimated total for the week (so far) is 130,000, which is below last week’s 248,000 and above last year’s 123,000.
The USDA report LM_Ct131 states: So far for Tuesday 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 Texas Panhandle live purchases traded at 141.00. In Kansas last week live purchases traded from 140.00-141.00. For the prior week in Nebraska live and dressed purchases traded from 143.00-145.00 and from 228.00- 230.00, respectively. In the Western Cornbelt for the previous week live and dressed purchases traded from 143.00-145.00 and from 228.00-232.00, 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, September 08, 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
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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