The October Lean Hogs contract gap opened lower, closed the gap then collapsed. It traded down to and settled down limit for the day. The settlement price was 76.45. There is support at 76.175 and then 75.60. A break down below 75.60 could see price continue its tumble down to 74.25 support level. If support holds consolidation within the Monday range is likely. The Lean Hog Index surged again and is at 78.86 as of July 25th. The pork cutout index jumped to 82.05 as of July 26th.
October Live Cattle made a new high at 110.60 this morning which is just below resistance at 110.80. It failed and turned lower, trading down to the session low at 109.15. This is just above the 13 DMA at 109.03. It settled at 109.45. Support is below at 108.65. A failure from here could see price test the 107.30 support level. If support holds then a retest of the high is likely. The cash market was quiet. Boxed beef cutouts were higher as choice cutouts were up 1.09 to 213.26 and select was up 1.42 to 189.76 on light to moderate demand and offerings. The choice/ select spread widened to 23.50 and the load count was 91. Slaughter was 119,000.
September Feeder Cattle took over as the lead contract as its volume was higher than the August contract. It opened higher and traded to a new high on the continuous chart at 144.175. It was held back by strong resistance at 144.25 and the 100 DMA at 144.37. Feeders broke down and traded to the session low at 142.65. It settled at 142.825. It formed a bearish engulfing candle. A break down below support at 142.40 could see price test the 140.775 support level. The 21 DMA is nearby at 140.72. A rally above the high could see price resistance143.50 and then the high. The Feeder Cattle Index continued to strengthen and is now at 141.50 as of July 26th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 1 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.