June Lean Hogs opened down limit and stayed there for the entire trading session. It settled at the down limit price of 89.75. President Trump tweeted on Sunday that more tariffs and higher tariffs on goods that already have tariffs are coming. Some as soon as this Friday as he said talks are moving too slowly and his patience is wearing thin. The rumors that China keeps trying to change sections of the trade deal that have been agreed to must be true and the President isn’t going to allow that to happen. So he will try to pressure the Chinese and now the negotiations are up in the air. The market will move in relation to future tweets, in my opinion. Hogs will have expanded limits on Tuesday. Stay tuned.
June Live Cattle followed Hogs lower as it gap opened lower and traded to a new low for the down move. It fell to 111.875 which is just below the 112.35 support level and then reversed course and soared to the session high at 114.875, closing the gap. The rally didn’t last and the market broke down and settled just below support at 112.275. It formed a bearish outside candlestick. Continued downside action could see price test support at 110.80. If support holds price could retest the Monday high.
August Feeder Cattle gap opened lower, nearly going down limit and tested support at 142.45. It made the low at 142.25 and then did a 180 and rallied back to the 100 DMA (147.075), closing the gap as it rallied to 147.00. The rally couldn’t be sustained and price traded lower from the high and settled at 144.35. This is a new low for the down move, but the settlement in the middle of the range could be positive for Feeder Cattle. If settlement holds we could see a retest of the 100 DMA. !42.45 is strong support and a failure to hold back any selling could see price test support at 140.775.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, May 9th 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. Blog