The December Lean Hogs contract opened higher pulled back to the session low at 68.675 then rebounded and traded to the high of the day at 70.80. It once again pierced the 69.80 resistance level only to fail at the end of the session to close at 69.60. It was a new high for the week but is still below the September 30 high at 72.725. The down trend is still in place and a failure from the low could see price revisit the 67.80 support level. Support then comes in at 66.55. A bounce off of settlement should see price best the 69.80 resistance level again and a breakout above the high could see price test resistance at 71.325 -71.85. The Lean Hog index rose and is at 60.65 as of 10/9/2019. The Pork Cutout Index continued its climb and is at 76.75 as of 10/10/2019.
December Live Cattle continued its lackluster trade and once again couldn’t best resistance at 112.35. It made its high at 112.30 and settled nearby at 112.15. The low was 111.10 just above the 110.80 support level. The last three sessions saw price basically stuck between these two support and resistance levels. A failure from settlement could see price test support at 110.80 and a break down below here could see a test of support at the rising 21 DMA now at 108.85. A breakout above 112.35 could see price test resistance at 113.90 and the nearby declining 200 DMA at 113.94. This could be strong resistance. The cash market remains quiet with light trading in Nebraska at 172.00 on a dressed basis and a small amount at 109.00 – 110.00 on a live basis. The Southern Plains have been silent so far. Boxed beef cutouts were up with choice cutouts up 0.03 to 215.66 and select up 2.02 to 188.68 on moderate to fairly good demand and light offerings. The choice/ select spread narrowed to 26.98 and the load count was 110. Slaughter was 117,000. Slaughter is estimated at 61,000 for Saturday to bring the weekly estimate to 645,000.
November Feeder Cattle traded in a tight range in a lackluster session and formed an inside candlestick. It made the high at 144.65 and the low at 143.375. Settlement was at 144.25. Settlement is right at the key level 144.25 and should key trade for Monday. If settlement holds, a test of resistance at 145.05 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 142.44. Support then comes in at 138.95. The Feeder Cattle Index inched higher and is at 144.65 as of October 9th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, October 18th at 2:00 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.