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Livestock Report


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Walsh Trading Daily Insights

Commentary

The livestock markets started the new month and new week on a sour note. The markets opened lower and tested support levels with cattle markets mostly able to recover and hogs remaining weak throughout the session. July Lean Hogs opened at the session lows and consolidated near the lows all session. It wasnt able to trade below Fridays new low for the down-move however, forming an inside candlestick in the lower part of Fridays range. China has told state run companies to halt purchases of US pork and another plant temporary shutdown slowing the recovery in slaughter levels, the main culprits in my opinion. Support on Tuesday is at 54.775, 53.825 and then 51.80. Resistance is at 55.625, 56.10 and then 57.025. Estimated Slaughter for Monday is at 403,000, this is above last weeks holiday slaughter of 2,000. This is below last years slaughter at 465,000. The Pork Cutout Index fell and is at 92.07 as of 5/29/2020. The Lean Hog Index dropped and is at 61.25 as of 5/28/2020. August Feeder Cattle opened lower and broke down to test support at 132.075, making the low above it at 132.525. It recovered and surged to the high for the session at 136.725. This is above long-term resistance at the 200 DMA (135.75) and in a positive development settled above it at 136.125. Support is at 135.60, 134.25 and then 133.50. Resistance is at 136.75, 138.95 and 140.775. The Feeder Cattle Index decreased and is at 1258.96 as of 5/29/2020. August Live Cattle opened lower and broke down to the session low at 96.925. This is just below support at 97.075. It also surged, trading to its session high at 99.975. Settlement was 98.975. Support is at 97.075,96.10 and then 94.30. Resistance is at 99.375,100.275 and then 101.625. Boxed beef cutouts continued its descent from record levels. Choice cutouts crashed 22.19 to 341.15 and select collapsed 23.24 to 316.83. The choice/ select spread widened to 24.32 and the load count was 166. Slaughter levels are leveling off around the 110,000 mark. Mondays estimated slaughter is 110,000, above last weeks holiday shortened 4,000, but still below last years 122,000. Slaughter for the week is expected (hoped) to top 600,000 for the first time in weeks. The USDA report LM_Ct131 states: Thus far for Monday, trade was light on light to moderate demand in all feeding regions. Compared to last week in the Southern Plains, early live purchases traded unevenly steady compared to the bulk of last week, at 118.00. In Nebraska, compared to the bulk of last week, early live and dressed purchases traded unevenly steady at 118.00, and from 178.00-187.00, bulk at 187.00. In the Western Cornbelt compared to last week early dressed purchases traded unevenly steady from 180.00-187.00. The latest established live market in the Western Cornbelt was last week, with live purchases from 114.00115.00. The Monday range for cash live cattle so far is 114.00 -118.00. Dressed sales are from 178.00 187.00.

Trade Suggestion(s)

Risk/Reward

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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, June 5, 2020 at 2:00 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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