The February Lean Hogs contract rallied and is back in the middle of its 65.40 – 70.05 trading range. It made its high at 68.375 and settled at 67.975. It settled above the declining 100 DMA (67.34) and right at resistance at 67.90. Comments that President Trump may delay the December 15 deadline for additional tariffs helped spark the rally in Hogs, in my opinion. A continuation higher could see price test resistance at 68.75 and the then 69.90 – 70.05. A break down below the 100 DMA could see price test support at 66.55. The Lean Hog index declined and is at 58.12 as of 12/6/2019. The Pork Cutout Index ticked lower and is at 81.35 as of 12/9/2019.
The February Live Cattle continued its lackluster trade. It is in the lower end of its 123.30 – 127.15 trading range. Tuesday’s range was 124.35 – 125.025 and it formed an inside candle and a spinning top candlestick which is just indicating the consolidation and indecisiveness in the market. It settled at 124.575. This is just above support at 124.30. A failure from here could see the 122.80 support level tested. A breakout above settlement could see resistance tested at 125.80. Resistance then comes in at 126.625. Cash is quiet so far this week. Boxed Beef cutouts were lower on light to moderate demand and heavy offerings. Choice cutouts fell 2.15 to 221.49 and select dropped 1.14 to 205.35. The choice/ select spread narrowed to 16.14 and the load count was 208. Slaughter was 122,000.
January Feeder Cattle continued its slow dance with the 140.775 and 142.40 support and resistance levels. The high was 142.50 and the low 140.925. It settled at 141.65. A rally above 142.40 could see resistance tested at 143.50 and then 144.25. A break down from 140.775 could see price test the 100 DMA now at 140.03. A breakdown from there could test the 138.95 support level. The November 22 low at 138.275 is next. The Feeder Cattle Index was lower and is at 143.33 as of 12/6/2019.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, December 12th 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.