The December Lean Hogs contract gap opened higher trading above resistance at 69.80 and making the high at 70.325 for the session. It collapsed and traded down nearly closing the gap from yesterday’s 68.625 high making the low at 68.75. It bounced off the low and settled at 69.475. If price and hold settlement a re-test of Wednesday’s high is possible. Resistance then comes in at 71.325 -71.85. A failure from settlement could see price close the gap and consolidate within the Tuesday range. The Lean Hog index rose and is at 59.59 as of 10/7/2019. The Pork Cutout Index continued its climb and is at 16.03 as of 10/8/2019.
December Live Cattle opened higher then traded down to the low of the day at 110.45. It reversed course and then broke out above the 110.80 resistance level trading up to 112.20 for the session high. It stopped just below the 112.35 resistance level and then fell back and settled at 111.175. It formed an outside day candle with a small body. A failure from settlement could see price break support at 110.80 and break down to test support at the rising 13 DMA at 110.02. A failure from here could then move towards support at 108.65. If settlement holds, a retest of the high is possible. The cash market was at a standstill. Boxed beef cutouts were mixed with choice cutouts up 1.00 to 214.60 and select down 0.94 to 186.12 on light to moderate demand and heavy offerings. The choice/ select spread widened to 28.48 and the load count was 171. Slaughter was 117,000.
November Feeder Cattle opened above the 8 and 13 DMAs, made the low at 141.55 then exploded higher, nearly trading up limit on the session. It made the high at 145.575 and pulled back settling at 144.25. Settlement is right at the key level 144.25 and should key trade for Thursday. If settlement holds, a retest of the high is likely. Resistance then comes in at 146.20 and then 147.30. A failure from settlement could see price test support at 143.50 and then 142.40. Support is bolstered in this area as the 200 DMA is at 142.46. Support then comes in at 138.95. The Feeder Cattle Index inched higher and is at 144.45 as of October 8th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, October 10th 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.