June Lean Hogs held support and a strong recovery led to a rally to 90.175, just below resistance at 90.45. It is now in the upper section of May 7th trading range which is where Hogs have been trading in for the past 5 sessions. The range is 91.35 high to 85.375 low. If price can take out the 90.45 resistance level, it may challenge the May 7th high. Resistance then comes in at 92.375 and 93.50. If the seesaw swings down price could test support at 88.325 and then 87.06. Trade rumors continue to affect markets, which continue to create volatility in the market. The Lean Hog Index and Pork Cutout Index have been moving higher which I believe will limit downside price action as seasonal buying is here.
June Live Cattle attempted to rally from the open, reaching the session high at 111.55. It couldn’t maintain the rally and grinded lower for the remainder of the session, setting a new low for the down move at 109.35. It settled nearby at 109.50. A weak open could see price test support at 108.65. Support then comes in at 107.30. Another attempt to recover could see price test resistance at 110.80 and then the Tuesday high. There has been limited trading in the cash market with trades at 118.00 on a live basis and dressed sales from 183.00 to 190.00. The trades took place in the Nebraska and Iowa/ Minnesota regions. Boxed beef cutouts continue to move counter-seasonally. Choice cutouts were down 1.46 to 220.12 while select increased 0.08 to 208.97 on light to moderate demand and moderate offerings. The choice/ select spread narrowed to 11.15 and the load count was 126. Slaughter was 121,000.
August Feeder Cattle also made an early attempt to reclaim Monday’s decline. It traded up to resistance at 145.05, making the high at 145.075. It reversed and traded to a new low for the down move, falling to 141.925 and settling at 142.50, just above support at 142.40. Continued weakness could see price test support at 140.775. Support then comes in at 138.95. If the 142.40 support level holds price could consolidate within the Tuesday range.
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.* *
Senior Market Strategist
Walsh Trading, Inc.
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.