The July Lean Hogs contract broke down hard below the 83.325 support level nearly going limit down in the process. It made a new low for the down move and approached the 80.45 to 79 .80 support area making the low at 80.60. It settled at 81.35. This is a critical support area with the rising 100 DMA now at 79.573 alongside this area. A break down below this zone could see price approach support at 77.80. A rebound off the low has resistance at 83.325. The Lean Hog Index declined and is at 79.95 as of June 7th and the pork cutout index declined to 84.21 as of June 10th.
August Live Cattle consolidated within the Thursday range forming an inside candlestick. Settlement was just above the 104.20 support level at 104.275. Breaking down below support could see a test of support at 103.00. A recovery above the 105.325 high could see price revisit the declining 21 DMA at 106.334 and then resistance at 107.30. The cash market was quiet during trading hours and I haven’t seen any reports of trades so far after the futures close. Boxed beef cutouts were mixed as choice cutouts were up 0.13 to 222.23 and select was down 1.95 to 201.76 on light to moderate demand and moderate to heavy offerings. The choice/ select spread widened to 19.47 and the load count was 110. Slaughter was 118,000.
August Feeder Cattle was fairly stable in the wake of the corn rally. It didn’t trade below Wednesday’s low (134.525), continuing its consolidation within the lower part of that day’s range. It settled at 135.525. It formed a spinning top candlestick. A rally above resistance at 136.75 could see price test resistance at 139.175. A break down below Wednesday’s low could see support tested at 133.50 and then 132.075. The Feeder Cattle Index moved higher to 134.25 as of June 13th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 20th 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.