The October Lean Hogs continued its downward slide, making a new low for the down move on the continuous chart. It traded down 3.425 handles, more than the normal daily limit to 73.025 for the session low. This is just below the 200 DMA at 73.15. It tried to bounce and get above the 75.00 handle a couple of times, but a selloff in the last few minutes took price down and it settled weakly at 74.00. The 200 DMA is strong support and more support is nearby at 72.80. If it fails here, a test of the 71.85 – 71.325 support zone is possible. If support holds, consolidation within the Tuesday range is possible. The Lean Hog Index continues to surge and is at 80.36 as of July 26th. The pork cutout index increased again and is at 82.58 as of July 29th.
October Live Cattle eased lower in another sleepwalk session. It traded to the session low at 108.075 and settled at 109.075. The high was 109.325. 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 110.60 high is possible. Resistance is nearby at 110.80. The cash market was quiet. Boxed beef cutouts were higher as choice cutouts were up 0.77 to 214.03 and select was up 1.37 to 191.13 on good demand and moderate offerings. The choice/ select spread narrowed to 22.90 and the load count was 127. Slaughter was 117,000.
September Feeder Cattle traded lower early in the trading session testing the 13 DMA at 141.84 making the low at 141.675. It reversed course and rallied past the 100 DMA at 144.35 making the high just above it at 144.675. It dipped and settled at 144.05. A failure from the 100 DMA could see price retest support at 143.50 and then142.40. A rally past the 100 DMA could test the 200 DMA at 145.10. Resistance then comes in at 146.20. The Feeder Cattle Index continued to strengthen and is now at 142.08 as of July 29th.
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.