The December Lean Hogs contract made an early attempt to retrace some of Tuesday’s decline trading up to 68.50 for the session high. The rally fizzled and price broke down and traded down towards support at 66.55 and making the low just above it at 66.75. It staged a rally at the end of the day and settle at the key level 67.80. A failure at settlement could see price re-test support at 66.55. Support then comes in at 64.80. A rebound from 67.80 see price consolidate within the Tuesday range. The Lean Hog index continues to fall and is at 57.49 as of 9/16/2019. The Pork Cutout Index fell and is at 69.58 as of 9/17/2019.
December Live Cattle traded lower from the open and tested support at 104.85 making the low just above it at 104.875. It grinded higher most of the session before surging at the end of the day to settle above the 100 DMA (105.58) at 106.15. If cattle can continue higher from settlement a test of resistance at 107.30 is possible. Resistance then comes in at 108.65. A failure from the 100 DMA could see price revisit support at 104.85 – 104.20. The cash market traded at 101.00 – 101.25 lightly on the fedcattleexchange.com auction. Boxed beef cutouts declined with choice cutouts down 1.53 to 218.24 and select down 1.94 to 1191.97 on light demand and heavy offerings. The choice/ select spread widened to 26.27 and the load count was 172. Slaughter was 116,000.
October Feeder Cattle consolidated today trading between the 100 (138.575) and 50 (136.86) DMA’s. The high was just above the 100 at 138.675 and the low was 136.975. The low occurred early in the session and the high at the end of the session. It settled near the high at 138.40. This is just below the 100 DMA and could key trade on Thursday. A failure from settlement could see price test support at the 50 DMA and then fall back into its 135.825 to 133.55 trading range. A rally from settlement could see price test resistance at 140.775. The Feeder Cattle Index rose and is at 137.33 as of September 17th.
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.