The December Lean Hogs contract rallied off of support at 66.55 and traded past the declining 50 DMA (68.65) with the high at 68.875. It settled below the 50 DMA at 68.375. Positive trade news instigated the positive move. The failure to settle above the 50 DMA keeps the moving average as the key to trade for Tuesday in my opinion. Trading above the 50 DMA could see price test resistance at 69.80. A failure from settlement could see support tested at 67.80 and then 66.55. The Lean Hog index continues to fall and is at 55.80 as of 9/19/2019. The Pork Cutout Index inched higher and is at 68.57 as of 9/20/2019.
December Live Cattle gap opened higher as the bullish cattle on feed report and higher than expected slaughter for last week propelled price. The market rallied all session nearly going limit up at the end of the day. It made the high at 108.025 and settled at 107.775. A continuation above the high could see a test of resistance at 108.65 and then move towards resistance at 110.80. A failure from settlement could see price revisit support at 106.025. The cash market was at a standstill. Boxed beef cutouts declined with choice cutouts down 0.52 to 216.45 and select down 0.88 to 190.84 on light demand and moderate offerings. The choice/ select spread widened to 25.61 and the load count was 104. Slaughter was 116,000.
November Feeder Cattle took over as the lead contract today as its volume was higher than the October contract. It rallied and traded to the high at the end of the session at 139.975 and settled at 139.725. A rally from settlement could see price test resistance at 140.775. Resistance then comes in at 142.40. A breakdown below settlement could see price test support at 138.95 and then the 100 DMA at 138.26. The Feeder Cattle Index rose and is at 139.68 as of September 20th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, September 26th 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.