Livestock Recaps - 2022.01.13
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CATTLE
February cattle closed higher on the session with a very small range and an inside trading day. Talk that the market is a bit oversold after the recent setback, and ideas that strength in the beef market will help stabilize the cash market has helped to support. US beef export sales for the week ending January 6 came in at 942 tonnes for 2021 and 9,704 for 2022 for a total of 10,646. Cumulative sales for 2022 have reached 244,338 tonnes, up from 202,243 a year ago and the highest on record. The five-year average is 142,392 tonnes. The largest buyer this week was Japan at 4,073 tonnes, followed by South Korea at 1,353, Mexico at 1,342, and China at 975. South Korea has the most commitments for 2022 at 69,560 tonnes, followed by China at 45,467 and Hong Kong at 35,149. Boxed beef cutout values at midsession came in at $281.81, up $1.88 on the day.
Technical Outlook
LIVE CATTLE (APR) 01/14/2022: Daily stochastics are trending lower but have declined into oversold territory. A negative signal for trend short-term was given on a close under the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside target is now at 140.300. The next area of resistance is around 141.300 and 141.570, while 1st support hits today at 140.670 and below there at 140.300.
LEAN HOGS
February hogs closed moderately lower on the day but near the middle of the range. The selling has pushed the market down to the lowest level since December 9. While there is a cutback in the slaughter pace due to virus issues, traders see this as only temporary. US pork export sales for the week ending January 6 came in with net cancellations of 3,147 tonnes for 2021 and net sales of 19,805 for 2022 for a total of 16,658. Cumulative sales for 2022 have reached 240,037 tonnes, down from 368,957 a year ago and 509,141 at this point in 2020. The 5-year average for this week is 319,874. The largest buyer this week was Mexico, which canceled 80 tonnes for 2021 and bought 10,062 for 2022 for a total of 9,982. They were followed by Japan at 3,145, South Korea at 2,184 and China at 1,403. Mexico has the most commitments for 2022 at 72,258 tonnes, followed by Canada at 35,646, South Korea at 33,139, Japan at 32,944, and China at 24,755. Pork cutout values that midsession came in at $99.51, up $15.05 on the day.
Technical Outlook
LEAN HOGS (APR) 01/14/2022: The downside crossover of the 9 and 18 bar moving average is a negative signal. Declining momentum studies in the neutral zone will tend to reinforce lower price action. A negative signal for trend short-term was given on a close under the 9-bar moving average. The daily closing price reversal down puts the market on the defensive. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside objective is 83.270. The next area of resistance is around 86.270 and 87.020, while 1st support hits today at 84.400 and below there at 83.270.