The December Lean Hogs contract broke out above the September 17th high (70.60) on the continuous trading to a new high at 71.575. This is within the 71.325 – 71.80 resistance zone. There is also trendline resistance at 71.975 just above this zone. It settled at 71.40. This is a critical area for Hogs. A break out above this zone could see price move towards resistance at the 200 DMA at 74.237. There is resistance at 72.80. Positive trade news with Japan and comments from the President on China trade helped drive price higher, in my opinion. A failure from settlement could see price fall back and test support at 69.80. The Lean Hog index continues to fall and is at 55.13 as of 9/23/2019. The Pork Cutout Index rose and is at 69.20 as of 9/24/2019.
December Live Cattle grinded higher, inching past resistance at 108.65 and making the high at 108.70. It settled just below resistance at 108.50. If price can overtake resistance at 108.65 a move towards resistance at 110.80 is possible. A failure from settlement could see price revisit support at 107.30. The rising 8 DMA at 106.45 is the next level for support in the December Live Cattle. The cash market was at a standstill. Boxed beef cutouts were mixed with choice cutouts down 0.76 to 214.63 and select up 0.17 to 189.83 on light to moderate demand and moderate offerings. The choice/ select spread narrowed to 24.80 and the load count was 172. Slaughter was 117,000.
October Feeder Cattle also grinded higher and traded to the 200 DMA at 142.62, making the high just below it at 142.575. It settled at 142.45. A breakout above the 200 DMA could see price test resistance at 143.50. Resistance then comes in at 144.25. A breakdown below settlement could see price test support at 140.775. The Feeder Cattle Index rose and is at 140.03 as of September 24th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, September 26th 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.