The October Lean Hogs continued its downward slide, making a new low for the down move on the continuous chart. Another limit down move sent price below the 200 DMA (73.23) all the way past the 71.325 support level to the low and settlement at 71.00. The trading range will expand to a 4.5 handle limit for Thursday’s trade. More weakness could see price test support at 70.125 and then 68.75. If support holds, consolidation within the Wednesday range is possible. The Lean Hog Index continues to surge and is at 82.10 as of July 29th. The pork cutout index also surged and is at 84.14 as of July 30th.
October Live Cattle traded down to the 107.30 support level making the low just below it at 107.10. It settled just above support at 107.65. Continued weakness could see price test support at 106.025. If support holds a return to resistance at 108.65 is possible. The cash market traded at 185.00 on a dressed basis. Boxed beef cutouts were lower as choice cutouts were down 0.49 to 213.54 and select was down 1.44 to 189.69 on moderate demand and offerings. The choice/ select spread widened to 23.85 and the load count was 156. Slaughter was 120,000.
September Feeder Cattle couldn’t challenge the 100 DMA (144.30) as it failed from yesterday’s 144.05 settlement price. It broke down and traded to 141.375 for the session low. It stopped at the 21 DMA (141.35) and recovered enough to settle above the 142.40 support level at 142.45. A failure from 142.40 could see price revisit the 21 DMA and then support at 140.775. There is trendline support at 139.95. If support holds then price could retest resistance at 143.50 and then the 100 DMA. The Feeder Cattle Index ticked higher to 142.15 as of July 30th.
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.