The October Lean Hogs bounced nicely off of Friday’s limit down move. It traded up to 64.475 before sliding a touch to settle at 64.025. The rally, however, was just consolidation within Friday’s trading range. It formed an inside candlestick. If the recovery off the limit down move continues and it trades past resistance at 64.80, a test of resistance at 66.55 is possible. A failure from settlement could see support tested at 63.325 and then 61.80. The Lean Hog index fell to 79.02 as of 8/15/2019. The Pork Cutout Index declined to 88.49 as of 8/16/2019.
October Live Cattle started the session on a positive note, rallying past resistance at 99.375 to the session high at 99.925. It couldn’t handle success however and grinded lower the remainder of the session making the low at the end of the day at 98.10 and settling nearby at 98.225. A recovery off of settlement could see price revisit resistance at 99.375. Resistance then comes in at 100.275. Continued selling could see the Thursday low revisited at 97.775. A failure from here could sed prices down to 96.10. The cash market was at a standstill. Boxed beef cutouts were higher with choice cutouts up 0.44 to 239.13 and select up 1.26 to 214.52. The choice/ select spread narrowed to 24.61 and the load count was 60. Slaughter was 115,000.
October Feeder Cattle is now the lead contract as its volume exceeds the September contract’s volume. It started the day strong as it opened above Friday’s settlement and traded up to the high of the day at 135.65. This is right at resistance at 135.60. It failed from here and traded lower the remainder of the day and made the session low at the end of the session at 133.025. It settled at 133.175. This took price below support at 133.50. A failure from settlement could see price test support at 132.075 and then 131.25. Support then comes in at 129.65. If settlement holds a retest of resistance at 133.50 and then 134.25 is possible. Resistance then comes in at 135.60. The Feeder Cattle Index declined to 136.33 as of August 16th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 22 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.
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Senior Market Strategist
Walsh Trading, Inc.
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.