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Livestock Report


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Walsh Trading Daily Insights

Commentary

August Lean Hogs made a new low for the down move at 47.525, recovered and rallied to the session high at 49.125, then settled in the middle of the trading range at 48.45. It formed an outside candlestick as the range was wider than Fridays range. There is a gap however from Thursdays low at 50.60 to Fridays high at 48.95. Hogs are in a downtrend in my opinion and the gap could be strong resistance. Support on Tuesday is at 47.775, 46.30 and then 43.05. Resistance is at 49.35, 50.475 and then 51.80. The Pork Cutout Index increased and is at 65.21 as of June 26, 2020. The Lean Hog Index recovered off its low and is at 45.23 as of June 25, 2020. Estimated Slaughter for Monday is at 468,000. This is above last weeks slaughter of 449,000 and above last years slaughter at 456,000.

August Feeder Cattle took a knockdown punch mid-morning, trading down past the 131.10 support level and last Tuesdays low (131.025) to the session low at 130.45. It rose from the canvas and fought its way to the session high at 133.90. It settled nearby at the key level at 133.50. The battle continues with settlement in the middle of its 138.80 128.325 trading range. Monday has support at 132.075, 131.10 and then 129.65. Resistance is at 134.25, 135.60 and then 136.75. The Feeder Cattle Index increased and is at 130.04 as of 6/25/2020.

August Live Cattle continued its consolidation within last Tuesdays trading range. The Tuesday high was 98.125 and its low was 94.75. Price has come back to the middle of the Tuesday range with the low settlement at 96.475. The low volume trade persists and the price ranges have tightened considerably. Support is at 96.10, 94.30, the rising 50 DMA at 94.19, trendline support at 93.425 and then 92.15. Resistance is at the declining 100 DMA on the continuous chart at 97.39, 98.125, 99.375 and then 100.275. Boxed beef cutouts stabilized on Monday with choice cutouts up 1.19 to 208.36 and select up 1.86 to 200.71. The choice/ select spread narrowed to 7.65 and the load count was 150. Mondays estimated slaughter is 121,000, above last weeks and last years slaughter of 119,000. This is a shortened kill week due to the July 4th holiday on Saturday. The USDA report LM_Ct131 states: Thus far Monday trade was light on light to moderate demand in the Western Cornbelt. Compared to last week, early dressed purchases traded steady to 3.00 lower mostly at 153.00. A few early live purchases traded from 95.00-97.00, however not enough for an adequate market test. The latest established live market in the Western Cornbelt was last week with purchases mostly from 97.00- 98.00. Trade was mostly inactive on light demand in the Southern and Northern Plains. The latest established market in the Texas Panhandle was last week with live purchases from 93.00-95.00, few up to 97.00. Last week in Kansas live purchases trade from 95.00-97.00, bulk at 97.00. In Nebraska last week, live purchases traded from 95.00-98.00, bulk at 95.00. Dressed purchases last week traded from 155.00-156.00.

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, July 2, 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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