The July Lean Hogs contract continues to make heads spin as a complete reversal of fortune took place on Monday. Friday’s limit down move was completely erased and then some as price took out the Friday high (85.90) and made the session high at 86.725 up 3.375 on the day. It settled at 86.20.President Trump pulling back on proposed tariffs is the likely reason for the renewed euphoria in the hog market. If price can climb above resistance at 87.06, a test of resistance at 88.325 is possible. Failure from the Monday high could see price retest support at 85.375. The Lean Hog Index declined and is at 80.30 as of June 6th and the pork cutout index rose to 84.35 as of June 7th.
August Live Cattle also had a remarkable turnaround going limit up for the session. It settled at 106.30. It settled above resistance at 106.025 and follow through buying could see price test resistance up at 107.30 and then 108.65. A failure from the high could see price pullback and test the 104.85 – 104.20 support area. The cash market was quiet. Boxed beef cutouts were mixed as choice cutouts were down 0.65 to 221.66 and select was up 1.87 to 208.79 on moderate demand and light offerings. The choice/ select spread narrowed to 12.87 and the load count was 91. Slaughter was 121,000.
August Feeder Cattle was strong as it rallied to resistance at the 21 DMA (141.053). It made the high just above it at 141.075. Another end of session smack down took price to 138.875. It settled at 139.825. If the 21 DMA holds back buying pressure a retest of support at 138.95 and then 136.75 is possible. Continued strength could see price overtake the 21 DMA and test resistance at 142.40 and then 143.50. The Feeder Cattle Index moved higher to 132.26 as of June 7th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 13th 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.