The October Lean Hogs contract reversed course, closing one of its gaps in the process. The break down took price down to the Thursday high at 63.175 where it found support and a slight recovery saw it settle at 63.625. It settled just above the 63.325 support level and could key the price action for Tuesday. If settlement holds, price could revisit resistance at 64.80 and then the Monday high at 66.025. A failure from 63.325 could see price test support at 61.80 which would close the gap from Wednesday’s high (61.925) to Thursday’s low at 62.20. The Lean Hog index continues to fall and is at 59.71 as of 9/12/2019. The Pork Cutout Index fell and is at 71.14 as of 9/13/2019.
December Live Cattle is now the lead contract as its volume is higher than the October contract’s volume. It tested support at the 50 DMA on the continuous chart at 103.80, making the low at 103.825. It settled a little higher at 104.025. If the market follows through lower a test of support at 103.00 and then 101.625 is possible. A recovery from settlement could see price test resistance at 104.80 and then the declining 100 DMA at 105.74. The cash market was at a standstill. Boxed beef cutouts declined with choice cutouts down 0.26 to 220.62 and select down 2.03 to 196.57 on light demand and moderate offerings. The choice/ select spread widened to 24.05 and the load count was 101. Slaughter was 117,000.
October Feeder Cattle traded between resistance at 135.60 and support at 133.50. Monday’s range was 135.475 to 133.55. A failure below 133.50 could see the 132.075 support level tested. Support then comes in at 131.10. A breakout above 135.60 could see resistance tested at 136.75. Resistance then comes in at 138.95. The Feeder Cattle Index was unchanged at 136.09 as of September 13th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, September 19th 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.