The July Lean Hogs contract opened below yesterday’s settlement and traded down to the session low at 84.475. It couldn’t take out yesterday’s low (84.325) and reversed course and traded higher for the remainder of the session. It rallied to the session high at 88.325 which is resistance and settled at 87.80. It formed a bullish engulfing candle and a break out above today’s high could see price test resistance at 90.45. A failure from settlement could see price consolidate within the Wednesday range. The Lean Hog Index declined and is at 83.31 as of May 24th and the pork cutout index dipped to 84.79 as of May 28th.
August Live Cattle made a new low at 106. 775. It made the high at 108.375. It settled in the upper middle of its trading range at 107.85. It was another quiet trading session for cattle. A rally above the high could see price test the 13 DMA at 109.19. Trading below support at 107.30 could see price revisit the low. Support is at 106.025. The cash market traded on the fedcattleexchange.com auction at 115.00. Boxed beef cutouts were mixed as choice cutouts up 0.24 to 223.53 and select down 0.46 to 09.99 on light to moderate demand and offerings. The choice/ select spread widened to 13.54 and the load count was 148. Slaughter was 122,000.
August Feeder Cattle traded past support at 140.775 to the session and new low for the down move at 140.125. It reversed course with a strong rally and traded up to resistance at 142.40 with the high above it at 143.025. It settled at 142.725. If price can continue higher and trade past resistance at 143.50 a retest of resistance at 144.20 and 145.05 is possible. A breakdown below the142.40 support level could see price re-test the 140.775 support level. The Feeder Cattle Index is at 136.65 as of May 28th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, May 31st 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.