The December Lean Hogs opened higher and traded to the session high at 65.975. This was just past the 21 DMA at 65.58. It failed to hold the 21 DMA and collapsed. It traded sown to 62.95, just above the Monday low at 62.925. It settled just above the low at 63.125. A break down below the low could see price test support at 61.80. Support then comes in at 59.825. A recovery from settlement could see price retest resistance at 64.25 – 64.80. Resistance then comes in at the 21 DMA. The Lean Hog index declined and is at 58.94 as of 11/11/2019. The Pork Cutout Index surged and is at 83.93 as of 11/12/2019.
December Live Cattle opened higher and fell. It tested support at the 119.15 level for a while then broke down and traded to the low of the day at 117.35. This is below the 117.80 support level and just above the 21 DMA at 117.15. It bounced and settled at 118.10. A rally from settlement could see resistance tested at 119.15. Resistance then comes in at 120.75. A pullback from 117.80 could see the 21 DMA retested and then support at 116.55. Support then comes in at 116.55. Cash traded in Kansas on a live basis at 115.00. Boxed Beef cutouts were higher on good demand and light offerings. Choice cutouts rose 1.84 to 242.34 and select was up 1.30 to 217.53. The choice/ select spread widened to 24.81 and the load count was 131. Slaughter was 118,000.
January Feeder Cattle opened at the highs and then collapsed going limit down and settling near limit down at 142.825. This brought price near the 142.40 support level and the 200 DMA at 142.39. This will be key to trade on Thursday, in my opinion. A failure from support could see price break down and test support at 140.775. If settlement holds consolidation within the Wednesday range is possible. The Feeder Cattle Index rose and is at 147.44 as of 11/12/2019.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, November 15th 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.