The August Lean Hogs contract opened lower and found support above the 80.40 – 79.80 support area. It made the low during the first minute of the trading session (80.925) and then exploded higher. It traded to the session high at 83.175 then consolidated its gain for the rest of the session. It settled at 83.00. It couldn’t rally above resistance at 83.325 so this level is the key for trade on Thursday, in my opinion. A rally above here could see price test the 13 DMA at 83.959 and then move towards resistance up at 85.375. A break down from settlement could see price retest the low. The Lean Hog Index inched lower and is at 79.26 as of June 17th and the pork cutout index dropped to 82.44 as of June 18th.
August Live Cattle couldn’t take out resistance at 106.025 as it made the high below it at 105.775.It grinded lower ant made the low at 104.475. Settlement was in the middle of the 104.85 – 104.20 trading range at 104.55. Breaking down below support could see a test of support at 103.00. If August cattle could trade above 106.025, a test of resistance at 107.30 is possible. Resistance then comes in at 108.65. The cash market was quiet. Boxed beef cutouts were higher as choice cutouts were up 1.06 to 221.59 and select was up 0.44 to 202.24 on moderate o firm demand and offerings. The choice/ select spread widened to 19.35 and the load count was large at 184. Slaughter was 121,000.
August Feeder Cattle traded below support at 136.75 making the low at 135.725. This is just above the 135.60 support level. It settled at 136.525. A break down below 135.60 could see price test support at 134.25. Support then comes in at 133.50. A rally above settlement could see price test resistance at 136.75 and then approach resistance at 138.95. The Feeder Cattle Index declined to 133.05 as of June 18th.
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.