Livestock Report

Ben DiCostanzo General Commentary Leave a Comment

Walsh Trading Daily Insights

Commentary

December Lean Hogs continued its attempt to break free of the 88.325 resistance level, trading to the high at 89.075 and once again failing to hold above resistance. It settled below it at 88.175 with the session low at 87.40. The cash market is trying to right itself as the cutout and cash index has grudgingly climbed this week. If price can overtake resistance, we could push past the Tuesday high and move towards resistance at 90.40. A failure from settlement could see price re-test support at 87.10.

A failure below 95.30 could see price test support at 93.50.

The Pork Cutout Index ticked higher and is at 105.87 as of 9/19/2022.

The Lean Hog Index increased and is at 98.42 as of 9/16/2022.

Estimated Slaughter for Tuesday is 485,000, which is above last week’s 476,000 and last year’s 463,000. The weekly estimated total (so far) is 963,000, which is above last week’s 951,000 and last year’s 928,000.

October Feeder Cattle tried to rally early in the trading session as a strong Live Cattle market bolstered Feeders. But cattle pulled back and corn rallied, putting pressure on Feeders and it gave way. It didn’t help that Feeders was attempting to thwart resistance at 182.70 (the 50-DMA is also creating resistance at this level…) that it has failed to overtake for the past four sessions after breaking down below it on September 13. Feeders fell apart and traded down to its low at 179.80. It settled near the low at 180.025. The break down today didn’t do much technically in my opinion, as it is still within the big breakdown candle from the 13th. Settlement was below support at 180.80 and near the low, so sentiment leans down ward. A failure from settlement could see support revisited at 178.95. Support then comes in at 175.70. If price retakes 180.80, we could test resistance at 182.70 and then 184.375.

The Feeder Cattle Index increased and is at 178.20 as of 9/19/2022.

December Live Cattle opened higher, made the session low at 150.90 and surged, trading to the session high at 152.225.  This is just above resistance at 151.75 and the market couldn’t hold the rally, first consolidating around this level and then falling back to test the low and settle near the low at 151.075. Traders started the day excited about a good start to the cash market on Monday, with a 147.00 trade and expectations for higher trade for the week. But with weak equity markets and a looming Fed rate high tomorrow, recession fears took over and knocked cattle back. If settlement holds, we could revisit resistance at 151.75 and then the Tuesday high. A break down from the low could see support tested at 149.375.

Boxed beef cutouts were mixed as choice cutouts dipped 0.81 to 251.64 and select increased 1.34 to 227.23. The choice/ select spread narrowed and is at 24.41 and the load count was 145.

Tuesday’s estimated slaughter is 128,000, which is even with last week and above last year’s 122,000. The estimated total for the week (so far) is 255,000, which is above last week’s 253,000 and last year’s 241,000.

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 limited on very light demand. Not enough purchases for a market trend. Last week in the Southern Plains live purchases traded at 142.00. For the prior week in Nebraska live and dressed purchases traded at 143.00 and from 226.00-227.00, respectively. For the previous week in the Western Cornbelt live and dressed purchases traded from 143.00-145.00 and at 226.00, respectively.

The USDA is indicating cash trades for live cattle from 145.00 – 147.00 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, September 22, 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.

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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

888.391.7894

Fax: 312.256.0109

bdicostanzo@walshtrading.com

www.walshtrading.com

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