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Livestock Report

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August Lean Hogs opened lower and traded to the session low at 48.10. The market reversed course and surged closing some more of the 50.60 49.375 gap with the session high at 50.00. Of course, the rally couldnt hold and it pulled back settling at 49.075. Hogs are in a downtrend in my opinion and the gap could be strong resistance. Support on Thursday is at 47.825, 46.30 and then 43.05. Resistance is at 49.35, 50.475 and then 51.80. The Pork Cutout Index ticked higher and is at 65.41 as of June 30, 2020. The Lean Hog Index up-ticked and is at 45.24 as of June 29, 2020. Estimated Slaughter for Wednesday is at 469,000. This is above last weeks slaughter of 468,000 and below last years slaughter at 478,000.

August Feeder Cattle traded to the session high early in the session at 133.95, then broke down and traded past support at 131.10 to the low at 130.775. It recovered and settled in positive territory at 133.075. It is still hanging out in the middle of its 138.80 128.325 trading range and now has to watch a short-covering rally in corn. If corn continues to rally will we see a return to the lower end of the trading range? Thursday 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 dipped and is at 129.13 as of 6/30/2020.

August Live Cattle was able to rebound on Wednesday settling in positive territory at 97.30. It formed an inside candle however as it traded within Tuesdays range, continuing its consolidation. Settlement was above long-term resistance at the declining 100 DMA (96.93) which is positive for the market in my opinion. Bulls cannot afford a continued back and forth around the 100 DMA, they need to step on the gas and pull away from the moving average. Back and forth increases the likelihood of a failure and a retest of the low of the trading range, in my opinion. Support is at the 100 DMA, 96.10, the rising 50 DMA at 94.68, 94.30, trendline support at 93.975 and then 92.15. Resistance is at 98.125, 99.375 and then 100.275. Boxed beef cutouts were lower on Wednesday with choice cutouts down 1.59 to 205.38 and select down 1.47 to 198.43. The choice/ select spread narrowed to 6.95 and the load count was 193. Wednesdays estimated slaughter is 121,000, above last weeks 120,000 and below last years slaughter of 122,000. This is a shortened kill week due to the July 4th holiday on Saturday. The USDA report LM_Ct131 states: So far for Wednesday in the Southern Plains negotiated cash trading and demand has been moderate. In the Texas Panhandle, compared to last week, live trades moved steady to 2.00 higher at 95.00. In Kansas, compared to the prior week, the bulk of live trades moved 2.00 lower at 95.00. Thus far for Wednesday in Nebraska negotiated cash trading has been slow on moderate demand. Live trades, compared to last week, moved steady to 1.00 higher from 95.00 to 96.00 and dressed trades, compared to the last reported market on Tuesday, moved steady to 1.00 lower from 154.00 to 155.00. So far for Wednesday in Colorado and Western Cornbelt negotiated cash trading has been very limited on very light demand. In Colorado a few live trades moved from 95.00 to 96.50. In the Western Cornbelt not enough trades for a market trend. The last live trade market was on Monday with trades from 96.00 to 97.00. The last dressed market was on Tuesday with trades from 152.00 to 155.00.

Trade Suggestion(s)


Futures N/A

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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 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.

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Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163


Fax: 312.256.0109

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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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