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Livestock Report


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Walsh Trading Daily Insights

Commentary

Livestock markets were weak on Wednesday giving back a lot of Tuesdays gains. Equity markets were hit hard along with Crude Oil as Wuhan virus fears reared its ugly head. The virus seems to be picking up steam in states that have re-opened stoking fear that the economy will shut down again and cause demand to crater. The positive aspect to the livestock decline is the breakdowns in price couldnt eat away all of Tuesdays gains as each of the lead contract months formed inside candlesticks. August Lean Hogs was the weakest of the bunch settling down 1.25 at 51.25. It opened lower and couldnt generate any strength as its high was at 52.45, which is below the Tuesday settlement. The low was 51.15. With the inside candle in place and the settlement near the low, a break down from the low could challenge the June 22 low at 50.425. Support for August Lean Hogs on Thursday is at 50.475, 49.35 and then 47.325. Resistance is at 51.80, 53.825 and then 54.775. The Pork Cutout Index dipped and is at 64.55 as of June 23, 2020. The Lean Hog Index inched higher and is at 45.17 as of June 22, 2020. Estimated Slaughter for Wednesday is at 468,000, this is above last weeks slaughter of 460,000 and below last years slaughter at 473,000. August Feeder Cattle opened at Tuesdays settlement and rallied to the session high at 134.45. The rally failed and price broke down to the low at 131.80. Price recovered and settled at 132.875. Price settled in the lower end of the inside candles trading range. Wednesday has support at 132.075, 131.10 and then 129.65. Resistance is at 133.50, 134.25, 135.60 and then 136.75. The Feeder Cattle Index increased and is at 129.12 as of 6/23/2020. August Live Cattle opened at Tuesdays settlement and traded to the session high at 97.85. The Tuesday high at 98.125, resistance at the declining 100 DMA at 98.105, horizontal line resistance at 98.125 and outside market weakness all proved too much for cattle and the market fell, trading to the session low at 96.025. Price attempted to recover from the low but in the end settled nearby at 96.35. Support is at 96.10, 94.30 and then 92.15. Resistance is at the declining 100 DMA on the continuous chart at 98.105, 98.125, 99.375 and then 100.275. Boxed beef cutouts declined with choice cutouts down 2.12 to 209.69 and select decreased 1.88 to 201.69. The choice/ select spread narrowed to 8.00 and the load count was 196. Tuesdays estimated slaughter is 120,000, even with last weeks slaughter, and below last years 123,000. The USDA report LM_Ct131 states: Thus far Wednesday, trade and demand was moderate in Nebraska. Compared to last week, live purchases traded 3.00-4.00 lower from 95.00-98.00. Dressed purchases compared to Tuesday, traded 1.00-2.00 higher from 155.00-156.00, bulk at 156.00. Trade was light on light to moderate demand in the Southern Plains and the Western Cornbelt. In Kansas compared to last week, early live purchases traded mostly 5.00 lower from 95.00-97.00, bulk at 97.00. In the Western Cornbelt, compared to Tuesday, dressed purchases traded steady to 1.00 higher from 155.00-156.00, bulk at 156.00. Live purchases on Tuesday traded at 98.00. In the Texas Panhandle a few early live purchases traded at 97.00, however not enough for an adequate market trend. Last week in the Texas Panhandle live purchases traded from 98.00-102.00.

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 Thursday, June 25, 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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