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Walsh Trading Daily Insights


August Lean Hogs consolidated within Thursdays trading range. Thursdays trade saw a close of the 50.60 50.35 gap with a high of 51.175. The Friday trade saw sellers come in and take price down to support at 49.35 making the session low at support. It settled at 49.875. The inability to make a new high on Friday and pullback to support keeps us in a trading range with the low at 47.575 and the top of the range now at 51.175. A break below the low end of the trading range keeps the down trend intact and sets the stage for a possible test of lower support levels. Support on Monday is at 49.35, 47.825, 46.30 and then 43.05. Resistance is at 50.475 and then 51.80. The Pork Cutout Index increased and is at 65.37 as of July 9, 2020. The Lean Hog Index decreased and is at 45.18 as of July 8, 2020. Estimated Slaughter for Friday is at 466,000. This is higher than last weeks holiday slaughter of 176,000 and last years slaughter at 460,000. Saturdays slaughter is estimated to be 283,000up from last years 39,000. This puts this weeks slaughter on top of last year with 2,606,000 vs. last years 2,419,000. Saturdays are becoming critical to eating through the excess supply in my opinion.

August Feeder Cattle returned to the 200 DMA (135.64) on the continuous chart, making the high at 136.05 and settling at 135.75. The rally on Friday was a good way to end the week and a strong open on Monday could see price test the top of the trading range at 138.80. Another failure at the 200 DMA could see price test the rising 50 DMA now at 132.95. Monday has support at 135.60, 134.25, 133.50, the 50 DMA and then 132.075. Resistance is at 136.75, 138.95 and then 140.775. The Feeder Cattle Index is strengthening and is at 134.92 as of 7/9/2020.

August Live Cattle held support at 99.375, making the low just below it at 99.175. It made its way higher and settled at 100.00. The high was 100.225, and even though it ended the week on a positive note, it still only traded within Thursdays trading range. If price can trade above the Thursday high, it could revisit the July 6th high at 101.425. Resistance is at 101.625 and then 103.00. A pullback could see support tested at 99.375, 97.075 and then 96.10. Boxed beef cutouts were mixed on Friday with choice cutouts up 0.91 to 204.50 and select down 0.54 to 194.29. The choice/ select spread widened to 10.21 and the load count was 93. This is the smallest load count in a while. Fridays estimated slaughter is 119,000, above last weeks 109,000 and above last years slaughter of 117,000. Saturdays slaughter is estimated at 71,000 which is above last years 65,000. Saturdays slaughter expectations put this weeks slaughter above last years. This weeks estimated slaughter is estimated to be 664,000 vs. last years 658,000. The USDA report LM_Ct131 states: Thus far Friday negotiated cash trade was limited on light to moderate demand in most feeding regions. Not enough purchase in any region for and adequate market test. The latest established market in any regions was on Thursday with purchases in the Northern Plains mostly at 96.00 with dressed purchases mostly at 157.00 in Nebraska. In the Western Cornbelt on Thursday, live purchases traded mostly at 99.00 with dressed purchases from 157.00-160.00. The latest established market in the Southern Plains was on Wednesday, with live purchases at 95.00 it the Texas Panhandle and from 94.00-95.00 in Kansas.

Trade Suggestion(s)


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 16, 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


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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