The July Lean Hogs contract consolidated within Wednesday’s trading range. The bullish engulfing candle is still in play and a break out above resistance at 88.325 could see price test resistance at 90.45. A failure from settlement (87.875) could see price consolidate within the Thursday range. The Lean Hog Index declined and is at 82.56 as of May 28th and the pork cutout index dipped to 84.20 as of May 29th.
August Live Cattle collapsed, traded down limit after settlement and made a new low for the down move at 104.85. It settled at 105.05. Cattle moved lower in lockstep with Feeder Cattle as panic over strong rallies in corn and wheat put pressure on price. August Cattle settled just above support at 104.85. A failure from here could see price test support at 103.00. Friday is month end if support holds short covering could lead o a recovery in price and a test of resistance at 106.025. The cash market traded at 115.00 on a live basis and at 186.00 for dressed. Boxed beef cutouts were mixed as choice cutouts were up 0.05to 223.58 and select down 1.12 to 208.87 on light to moderate demand and moderate offerings. The choice/ select spread widened to 14.71 and the load count was 154. Slaughter was 122,000.
August Feeder Cattle blew past support at 140.775 and made a new low for the down move at 138.225. Strong rallies in the grains caused panic selling and price crashed going down limit for the day. It will have expanded limits for Friday’s month end session. It settled down limit (138.225) and is below long-term trendline support at 139.175. A close below this monthly trendline support on Friday could indicate more selling to come and eventually see price test the April 2018 low at 128.875. This is the low end of the trading range from the May 2017 high at 163.50 to 128.875. Thursday’s settlement is also below the 138.95 support level. Continued pressure on Friday could see price test the next support level at 136.75. Support then comes in at 135.60. The Feeder Cattle Index fell to 134.87 as of May 29th.
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.