The December Lean Hogs contract is now the lead contract as its volume has overtaken the October contract’s volume. The December contract broke down hard, reversing Monday’s strong rally and going limit down for the trading session. It settled at 67.675 which is below the 67.80 support level. A continuation lower could see price test support at 66.55. Support then comes in at 64.80. A rebound could see price consolidate within the Tuesday range. The Lean Hog index continues to fall and is at 58.48 as of 9/13/2019. The Pork Cutout Index fell and is at 70.55 as of 9/16/2019.
December Live Cattle held support at the support at the 50 DMA on the continuous chart at 103.78, rallying to test resistance at the 100 DMA at 105.67. It made its high just above it at 105.90. It settled below the 100 DMA at 105.30. A breakout above the 100 DMA could see price test resistance 107.30. A failure from the 100 DMA could see price revisit the 50 DMA now at 103.78. The cash market was at a standstill. Boxed beef cutouts declined with choice cutouts down 0.85 to 219.77 and select down 2.66 to 193.91 on light to moderate demand and moderate to heavy offerings. The choice/ select spread widened to 25.86 and the load count was 166. Slaughter was 118,000.
October Feeder Cattle broke out above resistance at 135.60 surging and nearly going up limit on the day. It traded to a high of 138.525 which just below the 100 DMA at 138.72 and the 138.95 resistance level. It couldn’t hold the high and traded lower and settled at 137.30. A failure from settlement could see price test support at 136.75 and then fall back into its 135.825 to 133.55 trading range. A bounce off of settlement could see price revisit the 100 DMA. If the 100 fails to hold back the buying, price could test resistance at 140.775. The Feeder Cattle Index rose and is at 137.12 as of September 16th.
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.**
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.