The April Lean Hogs contract opened higher and rallied to 72.40, closing half of the 72.825 – 72.00 gap established on Monday. Price failed here and traded lower the rest of the session and settled at 71.30. This is just below the key area at 71.85 – 71.325. A failure at settlement could see price test support at the 21 DMA at 70.34 and then 69.90, the 50 DMA at 69.32 and then 68.75. Support then comes in at 67.80. If settlement holds, a retest of the Monday high is possible and then the rising 8 DMA now at 72.56. The Lean Hog index ticked higher and is at 61.64 as of 01/24/2019. The Pork Cutout Index ticked lower and is at 78.02 as of 01/27/2019.
The April Live Cattle made an early attempt to recover some of its decline, trading up to 121.85 for the session high. It failed to overtake resistance at 121.90 and fell. It traded below Monday’s 121.30 low to a new low at 120.625. It settled right on support at 120.70. A failure from settlement could see price test support at 119.15. Support then comes in at 117.80. Cash trade was at a standstill on Tuesday. Boxed Beef cutouts were mixed on moderate to good demand and moderate to heavy offerings. Choice cutouts decreased 0.74 to 212.85 while select was up 1.66 to 212.16. The choice/ select spread collapsed to 0.69 and the load count was 153. Slaughter was estimated to be 117,000.
March Feeder Cattle also made an attempt to recoup some of its Monday decline early in the trading session. It opened higher and traded up to 136.625, just below resistance at 136.75. It reversed course and traded to a new low for the down move at 134.975. It settled nearby at 135.40. Settlement was below the key level at 135.60. If settlement holds consolidation within the Monday range is likely. A breakdown below settlement could see price test support at 134.25 and then 133.50. The Feeder Cattle Index decreased and is at 143.76 as of 01/27/2020.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, January 30th 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.