Lean Hogs rallied today as news of two new cases of African swine fever is found in China. This is the sixth and seventh reported cases of the disease and more are sure to follow. There isn’t a cure for the disease and culling the infected is all they can do. Analysts guess that at least 38,000 have been culled in China and other countries in Asia and Europe are experiencing outbreaks of the disease. To try and control the disease transportation of hogs in the infected areas is prohibited. The disease doesn’t affect humans but is highly contagious and lethal for hogs. They haven’t figured out how the disease is being spread from farm to farm so all potential sources are being looked into, such as feed, equipment, people, etc.… The US pork industry is taking action to help protect the US herd from contracting the disease. If the outbreak continues to expand Hog prices could strengthen considerably. The deferred months could do better than the nearby as the need to replace culled Hogs grows. The October contract has traded between resistance at 51.80 and support at 49.925 for the last two sessions. A break out above 51.80 could lead to a test of resistance at 53.80. A break down below 49.925 could see price test the August 9th low at 47.825.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, September 7th 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.