The October Lean Hogs contract opened higher and up-ticked to the high of the day 64.40. It couldn’t handle success and traded to the session low at 62.40. It bounced at the end of the day and settled at 63.225. The settlement price is below the key level at 63.325 and could dictate direction for Trade on Wednesday. Trading above 63.325 could send price higher to test the Tuesday high and then resistance at 64.80. A failure could see price retest the Tuesday low and then support at 61.80. The Lean Hog index fell to 74.50 as of 8/23/2019. The Pork Cutout Index also fell and is at 81.05 as of 8/26/2019.
October Live Cattle opened higher and up-ticked to the session high at 101.325. It reversed course and broke down, trading past support at 99.375 to the low of the day at 99.20. A recovery at the end of the day took price back above 99.375 as it settled at 99.775. If settlement holds on Monday, we could see price revisiting resistance at 100.275 and then the Tuesday high at 101.325. A failure from settlement could see price test support at 98.10 and then the August 16th low at 97.775. The cash market was at a standstill. Boxed beef cutouts were lower with choice cutouts down 1.30 to 236.76 and select down 0.95 to 210.71 on light to moderate demand and offerings. The choice/ select spread narrowed to 26.05 and the load count was 112. Slaughter was 117,000.
October Feeder Cattle opened lower, traded up to the high of the day at 134.825. It broke down from here and traded past support at 132.075 to the low at 131.65. It recovered and settled at 132.50. A recovery off of settlement could see price test resistance at 133.50, 134.25 and then 135.60. Resistance then comes in at 136.75. A failure below support at 132.075 could see price test the Friday low at 130.975. Support then comes in at 129.65. The Feeder Cattle Index rose to 138.38 as of August 26th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 29 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.**
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.