Walsh Trading Daily Insights
July Hogs gave back most of Thursdays gains as the futures market couldnt overtake resistance at the 50 DMA (57.04) on the continuous chart. The Friday high was just below the 50 DMA at 57.00. It was a quiet trading session as traders seemed to be eager for the Memorial Day week-end to start. Trading will not occur in the Livestock markets until Tuesday morning. The price action formed an inside candlestick highlighting the lackluster trade. Support on Tuesday is at 55.625, 54.775 and the 53.825. Resistance is at 56.10, 57.025 and then 58.25. Estimated Slaughter dipped lower on Friday to 380,000 from higher levels earlier this week but still slightly above last weeks 375,000. Last Years slaughter was 404,000. Saturdays slaughter is estimated to be 170,000. This is above last years Saturday slaughter of only 40,000. Total estimated slaughter for this week is 2,130,000 head, above last weeks 2,098,000, but still below last years 2,310,000. The Pork Cutout Index continues its fall from last weeks peak and is at 102.63 as of 5/21/2020. The Lean Hog Index continued was lower and is at 64.59 as of 5/20/2020. August Feeder Cattle attempted to rally but fell back at the end of the session and settled near the low at 128.80. Support is at 127.575, 125.90 and then 122.775. Resistance is at 128.875, 128.65 and 131.10. The Feeder Cattle Index dipped lower and is at 126.24 as of 5/21/2020. August Live Cattle drifted lower and settled at 97.325. Support is at 97.075, 96.10 and the 94.30. Resistance is at 98.125, 99.375, 100.275 and 101.625. Boxed beef cutouts continued its decline from its record levels. Choice cutouts fell 5.07 to 396.74 and select dropped 8.35 to 374.18. The choice/ select spread widened to 22.56 and the load count was 101. Slaughter levels are climbing and Fridays estimated slaughter is 102,000, above last weeks 91,000. It is still far below last years 120,000. Saturdays estimated slaughter is expected to be 56,000, above last weeks 50,000 and last years 40,000. Total estimated slaughter for the week is 555,000, above last weeks 499,000, but is still a long way from last years 647,000. The USDA report LM_Ct131 states: Thus far Friday trade was limited on light to moderate demand in the Texas Panhandle, Nebraska and the Western Cornbelt. Trade was inactive on light demand in Kansas. Not enough purchases in any regions for an adequate market test. The latest established market in the Texas Panhandle was on Wednesday with live purchases mostly at 120.00. In Kansas on Thursday live purchases traded from 115.00-120.00, with the bulk at 120.00. In Nebraska on Wednesday live purchases traded from 119.00-120.00. Dressed purchases on Thursday traded, from 175.00-190.00, bulk from 180.00- 190.00. In the Western Cornbelt on Thursday, live purchases traded from 114.00-115.00 with dressed purchases from 175.00-190.00, bulk at 190.00.
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 Friday, May 29, 2020 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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Senior Market Strategist
Walsh Trading, Inc.
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