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February Lean Hogs opened increased and broke right down to the session low at 83.675. It discovered assist and rallied the remainder of the session to the excessive at 86.00. It settled close to the excessive at 85.925. With the money market persevering with to carry along with the indices working increased, merchants bid the market up threatening the breakdown candle from December 16th. The excessive for the 16th is at 86.60 and will result in a change in perspective if damaged. The cutouts have been particularly spectacular with exports weakening as we finish the yr and see little shopping for for the brand new yr up to now. The US Greenback has been robust and should have put a crimp in our exports. This might proceed because the Greenback continues to make new highs for its latest up transfer. So, like mentioned earlier, this makes the cutout power spectacular. The Hogs and Pigs report and Chilly Storage report comes out on Monday and this additionally might have performed a component within the robust rebound in Hogs. Merchants are inclined to cowl some positions they’ve placed on to guard themselves from an adversarial report. With the breakdown we’ve got seen within the Hogs, Merchants who acquired brief on the down transfer could have mentioned get me out after the market failed to interrupt right down to a brand new low on the open. The expectation continues to be for the money market to work decrease within the near-term as provides construct and packers pull again because of the brief weeks because of the holidays. However with the cutouts and money firming this week, issues could prove otherwise than normal. We’ll see!… If value breaks down from settlement, it might take a look at assist at 85.325. Assist then is available in on the rising 8-DMA now at 84.325. If value can maintain settlement, it might take a look at resistance on the December 16th excessive. Resistance then is available in at 87.10 after which the close by flat 200-DMA now at 87.30.
The Pork Cutout Index elevated and is at 95.36 as of 12/19/2024.
The Lean Hog Index ticked increased and is at 84.21 as of 12/18/2024.
Estimated Slaughter for Friday is 483,000, which is above final week’s 474,000 and final yr’s 427,940. Saturday slaughter is anticipated to be 148,000, which is beneath final week’s 150,000 and above final yr’s 69,444. The estimated slaughter for the week (up to now) is 2,581,000, which is above final week’s 2,560,000 and final yr’s 2,428,552.
January Feeder Cattle opened increased and broke right down to the low at 253.90. The breakdown examined assist at 254.30 and trendline assist just under at 254.075, stopping simply above the Thursday low at 253.80. With the Cattle on Feed report due after the shut value noticed some retracement in entrance of the report. The rally, nevertheless, wasn’t in a position to take out the Thursday excessive, reaching 256.125, which is simply shy of Thursday’s excessive at 256.325. The value motion subsequently fashioned an inside candlestick. Futures proceed to commerce at a reduction to the Feeder Cattle Index, indicating merchants really feel the index is due for a fall as we head into the expiration month. Quickly March will overtake the January contract in quantity and develop into the lead contract. Additionally it is buying and selling at a reduction to the index as merchants surprise if money costs will falter in March when the cattle bought to go on wheat begin their migration to feedlots, for my part. We’ll see!… If value holds settlement, it might take a look at resistance on the converging short-term shifting averages with the 8-DMA at 256.90, the 13 -DMA at 256.625 and the 21-DMA at 256.775. Resistance then is available in at 257.925. A breakdown from settlement might see a re-test of assist at 254.30.
The Feeder Cattle Index down ticked and is at 262.15 as of 12/19/2024.
February Reside Cattle opened increased and traded right down to the low at 186.275. This was a brand new low for the latest down transfer and simply above trendline assist at 186.05. The market reversed course and rallied the remainder of the session to the excessive at 188.60. The rally took out the excessive from Thursday’s session(188.40)and settlement was at Thursday’s excessive. This fashioned a bullish Outdoors Day candlestick. The rally, despite the fact that spectacular, is buying and selling at a reduction to the money market because the North and the South appear to be diverging in path. The North is seeing power, and the South is drifting, creating a selection between the 2 main areas, forcing merchants to place a reduction on futures, particularly the December contract, as nobody desires to see deliveries for my part. The bullish value motion is available in entrance of the Cattle on Feed report which was launched after the shut. The report got here in throughout the analysts’ estimates so for my part impartial to the commerce. Producers, nevertheless, have instructed me in our conversations after the report that they take a look at the report as bullish as a result of placements have been decrease. They discuss it as persevering with to indicate a scarcity in provide which they count on to result in increased costs as proven by the rising Feeder index as producers are aggressive in buying product, so they don’t seem to be overlooked within the chilly. Cutouts have been risky this week because the Rib has been everywhere, taking a beating on Friday and pressuring the selection on Friday because of its breakdown to 596.04. It was above 650.00 at occasions this week. This might lastly point out the vacation shopping for is over with and proceed to place stress within the cutout into the start of the brand new yr. This might hinder any additional development for the money market. We’ll see!… If value can’t maintain settlement, it might consolidate inside Friday’s vary. If settlement holds, we might see value take a look at resistance on the declining 8-DMA now at 189.70. Resistance is close by at 190.075. Resistance then is available in at 192.70.
Boxed beef cutouts have been combined as alternative cutouts fell 4.84 to 315.85 and choose elevated 1.80 to 285.91. The selection/ choose unfold narrowed and is 29.94 and the load rely was 107.
Friday’s estimated slaughter is 115,000, which is beneath final week’s 117,000 and final yr’s 120,900. Saturday slaughter is anticipated to be 5,000, which is beneath final week’s 12,000 and final yr’s 23,089. The estimated complete for the week(up to now) is 609,000, which is beneath final week’s 614,000 and final yr’s 647,172.
The USDA report LM_Ct131 states: Up to now for Friday within the Texas Panhandle and Kansas negotiated money buying and selling has been largely inactive with very gentle demand. Within the Texas Panhandle final week dwell FOB purchases traded from 191.00-192.00. To this point for the week, in Kansas, dwell FOB purchases have traded regular at 191.00, with a light-weight take a look at. In Nebraska and the Western Cornbelt negotiated money buying and selling was gradual on gentle to reasonable demand. To this point for the week, in Nebraska, dwell FOB purchases have traded regular to 0.50 increased from 195.00-195.50 and dressed delivered purchases have traded regular to five.00 increased at 305.00, with a light-weight take a look at of each dwell and dressed famous. To this point for the week, within the Western Cornbelt, dwell FOB purchases have traded regular to 2.00 increased from 195.00-196.00 and dressed delivered purchases traded regular to three.00 increased at 305.00.
The USDA is indicating money trades for dwell cattle from 191.00 – 196.00 and from 302.00 – 315.00 on a dressed foundation (up to now).
United States Cattle on Feed Down Barely
Cattle and calves on feed for the slaughter market in the USA for feedlots with capability of 1,000 or extra head totaled 12.0 million head on December 1, 2024. The stock was barely beneath December 1, 2023.
Placements in feedlots throughout November totaled 1.80 million head, 4 p.c beneath 2023. Web placements have been 1.74 million head. Throughout November, placements of cattle and calves weighing lower than 600 kilos have been 495,000 head, 600-699 kilos have been 420,000 head, 700-799 kilos have been 375,000 head, 800-899 kilos have been 276,000 head, 900-999 kilos have been 145,000 head, and 1,000 kilos and larger have been 85,000 head.
Marketings of fed cattle throughout November totaled 1.73 million head, 1 p.c beneath 2023.
Different disappearance totaled 55,000 head throughout November, 2 p.c above 2023.
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Ben DiCostanzo
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Walsh Buying and selling, Inc.
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