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Livestock Report


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Walsh Trading Daily Insights

Commentary

July Lean Hogs rallied early in the trading session, nearing resistance at the 100 DMA on the continuous chart (61.58), making the high at 61.175. Selling came in and pressed price lower and it settled in the lower end of the trading range at 59 .825. Support on Thursday is at 58.25, 57.025 and then 56.10. Resistance is at 59.825, 61.80 and then 63.325. Estimated Slaughter for Wednesday is at 415,000, this is above last weeks 397,000. This is below last years slaughter at 461,000. The Pork Cutout Index fell and is at 97.85 as of 5/25/2020. The Lean Hog Index dropped and is at 62.30 as of 5/22/2020. August Feeder Cattle gap opened higher, stalled near the 200 DMA (135.69) on the continuous chart, making the high at 135.00 and then pulled back to close the gap. It bounced and settled in the middle of the trading range at 134.025. Support is at 133.50, 132.075, 131.10 and then 129.65. Resistance is at 134.25, 135.60 and 136.75. The Feeder Cattle Index decreased and is at 126.11 as of 5/26/2020. The 5/25/2020 index was at 126.44. August Live Cattle rallied and settled strong at 100.725. This near the session high at 100.85. Settlement is above the high on May 18th at 100.00. The high is a new high for the up move. Support is at 99.375, 97.075 and then 96.10. Resistance is at 101.625 and then 103.00. Boxed beef cutouts continued its decline from record levels. Choice cutouts dropped 7.72 to 377.77 and select fell 9.82 to 350.20. The choice/ select spread widened to 27.57 and the load count was 175. Slaughter levels continue to recover from its lows and is getting closer to normal levels. Wednesdays estimated slaughter is 110,000, above last weeks 101,000, but still below last years 122,000. The USDA report LM_Ct131 states: So far for Wednesday in the Southern Plains negotiated cash trading has been limited on light demand. In Kansas a few live trades moved at 120.00. However, not enough for a full market trend. Last week in Kansas live trades moved from 115.00 to 120.00. For the prior week in the Texas Panhandle the bulk of live trades moved at 120.00. Thus far for Wednesday in Nebraska and Western Cornbelt negotiated cash trading has been slow with moderate demand. In Nebraska dressed trades moved from 178.00 to 190.00, thus far for the week the bulk have moved from 180.00 to 190.00. Not enough live trades on Wednesday for a market trend. The last reported live trade market was on Tuesday with trades from 112.00 to 115.00. In the Western Cornbelt for Wednesday, when compared to the prior week, the bulk of live trades moved steady to 1.00 higher at 115.00 and dressed trades, when compared to last week, moved steady to 2.00 lower from 178.00 to 190.00.

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.

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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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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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