June Live Cattle broke down to the 120.75 support level reaching a low of 120.85 on Monday April 22, 2019. Support held and the market recovered at the end of the day to settle at 121.575, just below the 121.90 key level. A breakout above 121.90 could see price test 122.825 and then work its way towards the 124.30 resistance level. A break down from settlement could see price test support at 120.80 and then 119.15. Sentiment was bearish despite a strong close to the cash market last week with cash trading at 130.00 on a live basis in Nebraska and 130 – 131 in the Iowa/ Minnesota region. The cattle on feed report was released after the close on Thursday and placements were higher than expected, coming in at up 4.8% on expectations of an increase 0f 3.3%. This offset the positive cash news as the high placements weighed on the market. April placements are expected to be strong which also contributed to the negative bias in my opinion.
June Lean Hogs broke down after a positive start to the trading session. It grinded lower and then broke down hard going limit down by the end of the session and settling just above down limit at 93.775. The breakdown took price to the lower end of the trading range, nearing the April10 low at 93.525. A close below here could see price make a run towards support at the 50% retracement level of the all-time high to the October 2016 low at 87.06. If support holds consolidation within the range should continue. Profit taking has been the game plan as the Chinese spot market has stabilized and the expected sales of pork to China are being realized. The old buy the expectation and sell the fact trading routine.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, April 25 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.