The December Lean Hogs reversed course from Tuesday’s strong trading session as reports the US-China Phase 1 trade deal could be delayed till December as the terms and venue remain uncertain. Hogs nearly went limit down after touching limit up on Tuesday. It traded down to a low at 64.45 and settled at 64.775. It is still stuck between resistance at 66.55 and support at 63.325. A break down below settlement could see price revisit support and then the October 8 low at 63.075. A recovery from settlement could see price retest resistance at 66.55. The Lean Hog index continued its decline and is at 60.36 as of 11/04/2019. The Pork Cutout Index rose and is at 77.23 as of 11/05/2019.
December Live Cattle dipped lower and tested support at the 8 DMA (118.468) making the low at 118.20 and recovering to settle at 119.00. This is right at the key level 119.15 which the market has been testing for the past 4 days. A push above the 119.60 high could see resistance tested at 120.75. A pullback from settlement could see support at 117.80 tested. Support then comes in at 116.55. The cash market was at a standstill. Boxed beef cutouts were higher with choice cutouts up 1.09 to 237.14 and select up 1.71 to 211.53 on moderate to good demand and offerings. The choice/ select spread narrowed to 25.61 and the load count was 132. Slaughter was 118,000.
January Feeder Cattle broke down and tested support at 143.50 and the 21 DMA at 143.59, making the low at 143.60. It bounced and settled at 144.425. This is right at the key level 144.25. A failure from 144.25 could see price test support at 143.50 and then 142.40. If settlement holds a retest of resistance at 145.05 and 146.20 is possible. The Feeder Cattle Index dipped lower and is at 146.24 as of 11/04/2019.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, November 7th 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.