The December Lean Hogs contract opened at yesterday’s settlement price and took off. It rallied all session going limit up at the end of the day. It settled up limit at 72.125. Limits will expand for the Hog complex to 4.5 handles. Settlement was above the 71.85 resistance level and could key trade for Wednesday. A continuation higher could see price test resistance at 72.80. Resistance then comes in at 74.25. The 200 DMA is at 74.66. This could be firm resistance. A failure from settlement could see price consolidate within Tuesday’s range. The Lean Hog index continues to rise and is at 62.11 as of 10/11/2019. The Pork Cutout Index continued its climb and is at 77.15 as of 10/14/2019.
December Live Cattle matched yesterday’s high in a lackluster trading session. That’s two day’s in a row with a high at 113.725. This is called a tweezer candlestick pattern. This could be a potential topping pattern for cattle. It is right at strong resistance at 113.90 and the 200 DMA now at 113.84. This is the second challenge of resistance and couldn’t pierce it. Same high and a hanging man candle for the second candle. The session also resulted in an inside candle. A failure from the 113.45 settlement could be the start of a pullback towards the rising 21 DMA now at 109,72. Support is at 112.35 and then 110.80. To negate the bearish pattern price needs to breakout above the high and resistance, in my opinion. Taking out 113.90 resistance could see price test resistance at 114.65 and then 116.55. The cash market was at a standstill. Boxed beef cutouts were up with choice cutouts up 0.80 to 218.02 and select up 2.15 to 191.48 on moderate to good demand and moderate offerings. The choice/ select spread narrowed to 26.54 and the load count was 160. Slaughter was 118,000.
November Feeder Cattle consolidated within Monday’s range. It formed an inside candle. It settled at 146.075. Settlement is just below the key level 146.20 and should key trade for Tuesday. A rally above 146.20 could see price challenge resistance at 147.30. Resistance then comes in at 148.40. A failure from settlement could see price test support at 145.05 and then 144.25. The Feeder Cattle Index rose and is at 144.26 as of October 11th (This the same as Monday. It didn’t get an update as of the article.)
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, October 18th at 2:00 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.