The April Lean Hogs contract consolidated within Thursday’s trading range forming an inside candlestick. Friday’s range was 74.50 high to 73.225 low with settlement at 74.10. It is trading below the 200 DMA (74.78) on the continuous chart and settlement was below the key level at 74.25. If price can break out above the high, a test of resistance at 75.60 and then 76.175 is possible. If price fails from settlement a test of support at 72.80 is possible. Support then comes in at 71.85. The Lean Hog index was increased and is at 60.15 as of 01/15/2019. The Pork Cutout Index increased and is at 74,24 as of 01/16/2019.
The April Live Cattle contract is now the lead contract as its volume was greater than the February contract’s volume. It is trading within the same trading range (127.90 high to 123.30 low) as the February contract on the continuous chart. Friday’s range was 127.30 high and 125.625 low with settlement at 127.25. If price can hold settlement, a test of resistance at 128.10 is possible. A break out above 128.10 could see price approach resistance at the March 1, 2019 high at 130.45. A failure from settlement could see price test support at 126.625, 125.80 and then 124.30. Cash trade for the week ranged from 123.00 to 126.50 for live cattle and 198.00 to 200.00 for dressed. Boxed Beef cutouts were higher on moderate to good demand and moderate offerings. Choice cutouts increased 1.27 to 214.17 and select was up 1.28 to 212.75. The choice/ select spread narrowed to 1.42 and the load count was 97. Slaughter was estimated to be 116,000. Slaughter is estimated to be at 631,00 for the week with Saturday slaughter estimated at 27,000. Last week’s slaughter was estimated at 640,000 and last year’s slaughter for this week was 626,000.
March Feeder Cattle consolidated within Thursday’s trading range, forming an inside candlestick. It traded from a low at 143.95 to the high at 145.125 and it settled at 145.00. The high was just above the key level at 145.05 and settlement was next door. If settlement holds a test of resistance at 146.20 is possible. Resistance then comes in at 147.30 and then the November 12th high at 147.775 is next. A failure from settlement could see price re-visit support at144.25. Support then comes in at 143.50. The Feeder Cattle Index declined and is at 145.74 as of 01/16/2020.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays, but with the holiday on Monday, our next webinar will be on Friday January 24th 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.