The December Lean Hogs contract made an attempt to break out above the 71.325 – 71.80 resistance zone. There was also trendline resistance at 71.975 just above this zone. It made the high at 71.75. The failure at resistance let to a collapse and futures traded down to the session low at 68.775. It was able to recover off the low and settled at 69.85. A recovery off of settlement could see price revisit resistance. The trendline drops to 71.45 on Monday. A break out above this zone could see price move towards resistance at 72.80. There is resistance at the 200 DMA at 74.237. A failure from settlement could see price fall back and test support at 67.80. The Lean Hog index finally had an uptick and is at 54.72 as of 9/25/2019. The Pork Cutout Index rose and is at 70.38 as of 9/26/2019.
December Live Cattle traded higher, breaking out above resistance at 108.65 and making the high at 110.75. The high is just below resistance at 110.80. It settled at 110.575. This is the highest the lead contract has been since the 110.60 high on July 29th. If price can overtake resistance at 110.80 a move towards resistance at 112.35 is possible. A failure from settlement could see price revisit support at 108.65. Positive news in the cash market helped drive price higher. The cash market traded at 103.00 in Texas and Kansas which is higher than last week’s trade. The positive trade took place in Iowa, at 106.00 on a live basis and the 107.00 trades in Colorado and Nebraska. It also traded at 165.00 for dressed. Boxed beef cutouts were lower with choice cutouts down 0.93 to 212.58 and select down 0.53 to 189.86 on light demand and moderate offerings. The choice/ select spread narrowed to 22.72 and the load count was 102. Slaughter was 116,000. Slaughter for Saturday is expected to be 65,000 which will bring the weekly total to 648,000.
November Feeder Cattle also traded higher, making the high at 143.325. It settled at 142.97. It is below resistance at 143.50 and could key trade for Monday. A breakout above 143.50 could see price test resistance at 144.25 and then 145.05. A breakdown below settlement could see price test support at 140.775. The Feeder Cattle Index rose and is at 141.77 as of September 26th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, October 3rd 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.