Lean Hogs and the Cattle markets responded positively to the announcement of a trade agreement with Mexico. Lean Hogs traded up limit in the first two contacts and the October Live Cattle briefly going limit up were the highlights for the day. Feeder Cattle traded strong across the board but didn’t come near it up limit levels. Lean Hogs will have expanded limits on Tuesday. The October Lean Hogs closed above the 53.80 resistance level and could possibly test resistance up at 55.475 on follow through buying on Tuesday. Live Cattle could test resistance at 110.80 where I would sell futures with a stop above 111.50. October Feeder Cattle was stopped by the 50 DMA (150.60) on the continuous chart as the high came in at 150.575. A push above the 50 DMA on Tuesday could be sold at the 151.55 resistance level with a stop above 152.30, in my opinion. Analysts will dissect the trade agreement going forward, so I expect the markets to remain volatile and Canada will have to get on board and of course the Canadians are saying they would only agree to a deal that would benefit Canada. This is an attempt at leverage as the negotiations move forward. There is hope that a final three nation agreement could be made by Friday. Stay tuned!
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 30th 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.
**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,
www.walshtrading.com
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.