The July Lean Hogs contract sold off hard taking out the Monday low and settling limit down for the session. The settlement price was 83.35 which is right at the 83.325 support level. Continued weakness on Monday could see price make its way towards the 80.45 – 79.80 support zone. If price holds the 83.325 support level consolidation is likely with Friday’s range. The Lean Hog Index declined and is at 80.56 as of June 5th and the pork cutout index rose to 84.33 as of June 6th.
August Live Cattle made a new high for the week at 105.375 and then collapsed. It broke down to support at 103.00 making the low just above it at 103.05. It settled at 103.30. Continued pressure on Monday could see the 102.30 low from May 31st challenged and then the 101.625 support level. If support hold price could work its way back to the high. The cash market has traded today with sales from 110.00 – 114.00 on a live basis. A small amount traded at 183.00 on a dressed basis. Boxed beef cutouts were lower as choice cutouts were down 0.89to 222.11 and select down 0.03 to 207.18 on light to moderate demand and moderate to heavy offerings. The choice/ select spread narrowed to 14.93 and the load count was 173. Slaughter was 119,000.
August Feeder Cattle made an early attempt to take out Thursday’s high (140.275) and failed. It reached 140.175 and then made its way lower. It traded to the session low at 135.925 and was able to recover and settle above the 136.75 support level at 137.25. Continued weakness could see price test support at 135.60 and then 134.25.If 136.75 support holds price could test the Thursday high. The Feeder Cattle Index inched higher to 131.84 as of June 6th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 13th 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.