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Livestock Report


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Walsh Trading Daily Insights

Commentary

Livestock markets started the holiday shortened week on a strong note as August Feeder Cattle settles limit up for the session and July Hogs go limit up and settle just shy of limit up. August Cattle was rallied to the top of its trading range but couldnt reach 100.00. July Hogs settled at 59.575, just shy of its limit up high at 59.65. China continues to import vast amounts of pork from the US as April imports reached record levels of approximately 400,000 tons, up over 150% from last year. China import totals for the first four months of 2020 reached 1.35 million tons, up approximately 170% from last year. Slaughter levels continue to climb as the estimated slaughter topped 400,000. Support on Wednesday is at 58.25, 57.025 and then 56.10. Resistance is at 59.825, 61.80 and then 63.325. Estimated Slaughter for Tuesday is at 405,000, this is above last weeks 397,000. This is below last years slaughter at 477,000. The Pork Cutout Index continues its fall from its peak and is at 99.79 as of 5/22/2020. The Lean Hog Index continues to fall and is at 63.45 as of 5/21/2020. August Feeder Cattle was strong from the open and went locked limit for the day. It settled at 133.30 up limit for the session. Feeder Cattle will have expanded limits on Wednesday. Support is at 132.075, 131.10 and then 129.65. Resistance is at 134.25, 135.60 and 136.75. The Feeder Cattle Index increased and is at 126.96 as of 5/22/2020. August Live Cattle rallied and settled strong at 99.25. This near the session high at 99.675. The rally is tempered by the failure to best the high on May 18th at 100.00. Bears are defending this level with vigor. If they fail in the coming days to keep prices down, there could be stops above this level in my opinion. Support is at 97.075, 96.10 and the 94.30. Resistance is at 100.275, 101.625 and then 103.00. Boxed beef cutouts continued its decline from its record levels. Choice cutouts fell 11.25 to 385.49 and select collapsed 14.16 to 360.02. The choice/ select spread widened to 25.47 and the load count was 222. Slaughter levels are climbing and Tuesdays estimated slaughter is 106,000, above last weeks 99,000. It is still below last years 122,000. The USDA report LM_Ct131 states: Thus far for Tuesday negotiated cash trading has been limited with light demand in Kansas, Nebraska and Western Cornbelt. In Kansas a few live trades ranged from 110.00 to 120.00. In Nebraska a few live and dressed trades moved at 112.00 and 190.00, respectively. In the Western Cornbelt a few dressed trades ranged from 174.00 to 190.00. However, not enough trades in any of these regions for a full market trend. Last week in Kansas and Nebraska live trades moved from 115.00 to 120.00 and dressed trades, in Nebraska, ranged mostly from 180.00 to 190.00. For the prior week in the Western Cornbelt live trades moved from 114.00 to 115.00 and dressed trades ranged from 180.00 to 190.00. So far for Tuesday in the Texas Panhandle negotiated cash trading has been at a standstill. Last week live trades moved mostly at 120.00.

Trade Suggestion(s)

Risk/Reward

Futures N/A

Options N/A

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.

Sign Up Now

**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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About the author


Ben DiCostanzo
Senior Market Strategist
Walsh Trading

I began my career in the Securities industry working as a runner on the floor of the New York Stock Exchange while I attended Pace University. I then started working for Salomon Brothers in their Government Bond Trading arena. After graduating from Pace University with a degree in Accounting, I transferred to Chicago and became a member of the Chicago Mercantile Exchange utilizing my experience to execute trades and manage risk for institutional clients as a broker for Salomon Brothers on the trading floor. I then embarked to trade for my own account in the stock indices pits as a local before moving off the floor to aid and assist individual clients in their trading endeavors. I now work at Walsh Trading holding a series 3 broker’s license whose duties include being the firm’s Chief Market technician.

I understand that every client's needs are different, and I pride myself in tailoring my service to each client's unique circumstances and needs. Individual client experience, risk tolerance, and capital all play a role in how I approach the markets. I am involved in all markets using technical analysis to find opportunities. My approach is driven by the principles of capital preservation.

My trading philosophy is that if you can recognize and manage the risk, you have a better chance to be successful in trading. I advise clients to always use stops as money management in my opinion is the most important ingredient in trading commodities.

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