June Lean Hogs continued it trading within Tuesday’s trading range. Trading above the 90.45 resistance level could see price test resistance at 92.375. A break down below the 88.375 support level could see price approach the Monday low at 85.375. The tariff increases are here but it will take some time to effect trade. Cash prices should firm on cash and pork going forward as we are in a seasonally strong period. China still faces a dire situation as the African swine fever continues to disrupt its Hog industry. They need to eat and pork is a vital component of their diet. Inflation is high as pork prices have been bid up so I believe China will have to go to the world market to replace lost pork supplies. The US is a vital necessity for China to import enough pork to satisfy their craving.
June Live Cattle made a nice recovery off of yesterday’s low trade at 110.875, trading up to 113.725 just below resistance at 113.90. It couldn’t sustain the rally however, pulling back and settling at 112.45. The Cash market saw trades between 118.00 and 122.00 for the week on a live basis. Dressed sales were from 189.00 – 196.00. Boxed beef prices continued to move lower as choice cutouts dropped 1.36 to 221.11 while select rose 0.38 to 207.46 on light to moderate demand and moderate offerings. He load count was 111. The choice/ select narrowed to 13.65. Slaughter came in at 118,000.With an expected slaughter of 65,000 for Saturday the weekly kill is estimated to be 664,00 lower than last week’s 670,000 and above last year’s 655,000.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, May 16th 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.