April Lean Hogs rallied today going up limit at the end of the trading session. It passed the 100 DMA at 60.565 reaching the high at 60.725. It settled at 60.55. Follow through to the upside could see resistance tested at the 200 DMA at 61.375 and then 61.80. If momentum can push [rice above 61.80, a test of the 63.325 resistance level is possible. A failure from the 100 DMA could see price consolidate within the Friday range. The African swine fever continues its spread through China and Asia. China spot prices are starting to spike higher. US pork cutout prices are starting to rebound after getting beaten down. The cold storage report leaned to the bullish side. China has been buying pork from the US and taking delivery. I think the spiking Chinese spot market is the important catalyst. You are finally seeing rising prices in China as the disease continues its spread through the country. If this continues China will look to the US for more pork even with tariffs in place. If they lift the tariffs because they are desperate, I expect a massive wave of purchases of US pork.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 14th 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.