Walsh Trading Daily Insights
Commentary
October Lean Hogs continue to be stymied by the 93.50 resistance level, making the high just below it at 93.25 and breaking down to the session low at 91.375. It drifted and settled at 91.875. Cash continues to be pressured and traders are expecting cash to remain weak in the near term, in my opinion. Monday’s trade stayed within Friday’s trading range forming an inside candlestick. Settlement was below the key level at 92.375, and settlement was on weakness. If futures break down on Tuesday, we could see support tested at 90.40. Support then comes in at 88.325. If price can hold settlement, we could see price revisit resistance at 92.375 and then 93.50.
The Pork Cutout Index increased and is at 103.05 as of 9/09/2022.
The Lean Hog Index decreased and is at 99.57 as of 9/08/2022.
Estimated Slaughter for Monday is 483,000, which is above last week’s 2,000 and last year’s 470,000.
October Feeder Cattle failed to hold resistance at 185.80 early in the trading session, making the high at 186.20 and then breaking down the rest of the session as Corn rallied after the WASDE Report. The break down took price to the session low at 182.875 with settlement just above it at 183.125. The low was just above support at 182.70. If price falls below 182.70, we could pull-back and test support at 180.80. Support then comes in at 178.95. If price holds settlement, we could test resistance at 184.375 and then 185.80. Resistance then comes in at 187.20.
The Feeder Cattle Index decreased and is at 180.84 as of 9/09/2022.
October Live Cattle made the low at 145.45 and then raced to the session high at 146.10. That’s it for the day, nap time as cattle drifted and settled at 145.75. Cattle is trading in the upper end of its 146.25 – 142.275 trading range. Traders are thinking … hoping … for higher cash this week as expectations build for tighter supplies. But, with slaughter levels remaining elevated and weights not crashing, there seems to be plenty of cattle out there for packers to slaughter at their leisure. Cutouts remain strong, so packers are eager to buy cattle at their price and continue to have success managing slaughter and the price paid for cattle. If numbers become an issue, they could slow down Saturday slaughter to get their desired results, in my opinion. We’ll See! The USDA raised estimates for 2022 beef production by 16,000 #. A rally past 146.10 could see price test the high of the range, with resistance above it at 146.875. A break down from settlement could see support tested at 145.225. Support then comes in at 144.025.
Boxed beef cutouts were higher as choice cutouts increased 1.68 to 258.94 and select increased 1.03 to 235.76. The choice/ select spread widened and is at 23.18 and the load count was 97.
Monday’s estimated slaughter is 125,000, which is above last week’s 3,000 and last year’s 113,000.
The USDA report LM_Ct131 states: So far for Monday in the Southern Plains and Nebraska negotiated cash trade has been at a standstill. 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 141.00. For the previous week in Nebraska live and dressed purchases traded from 142.00 -143.00 and at 226.00, respectively. In the Western Cornbelt for the prior week live and dressed purchases traded from 143.00-146.00 and from 225.00-230.00, 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 15, 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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