The December Lean Hogs contract followed through to the downside dropping to 67.85 before a late session recovery took price higher and it settled at 69.10. The ranges continue to be wide with the early attempt to rally stopping at 71.000. The low was above support at 67.80 and the Monday low at 67.70. Buyers coming back into the market above those levels hopefully bode well for trading on Thursday. It is the wild west out there and export sales numbers come out before Thursday’s open and could key trade for the session. Hogs settled below the 69.80 key level so watch how price reacts to this area. A rally above 69.80 could see price revisit the 71.325 – 71.80 resistance zone. Resistance then comes in at 72.80. A failure from settlement could see price test the Monday low again. Support then comes in at the 21 DMA now at 66.98. I think traders are hoping for a nice purchase from the Chinese and a low level will probably disappoint the market. The Lean Hog index continues its rebound and is at 57.05 as of 9/30/2019. The Pork Cutout Index continued its climb and is at 72.87 as of 10/1/2019.
December Live Cattle traded lower after the open, making the session low at 109.20 before reversing and grinding higher for the rest of the day. It made new highs for the up move at the end of the session reaching 110.825. This is right at resistance at 110.80. It settled at 110.625. 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. A break down below 108.65 could lead to a test of support at 107.30. The cash market was at a standstill. Boxed beef cutouts were lower with choice cutouts down 0.50 to 212.97 and select down 0.15 to 185.90 on light to moderate demand and offerings. The choice/ select spread narrowed to 27.07 and the load count was 171. Slaughter was 116,000.
November Feeder Cattle was able to hold the 13 DMA (140.30) making the low at 139.575 and then reversing and trading higher for the remainder of the session. It made the high at the end of the day reaching 142.20. It settled at 141.675. It formed an outside day candlestick and a new high could see price push to the 200 DMA at 142.50 and then 143.50. Resistance then comes in at 144.25. A failure from settlement could see price revisit the low. The Feeder Cattle Index was higher and is at 143.09 as of October 1st.
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.