The April Lean Hogs contract continued its descent, breaking down and plowing past support, nearly going down limit during the session. It traded past support at 68.75, making the low at 68.675 and settled just above it at 68.825. A failure at support could see price test support at the 100 DMA at 68.01 and then 67.80. Panic selling could see price make its way down to the 66.55 support level. If settlement holds, price could retrace some of its decline. The Lean Hog index ticked higher and is at 61.74 as of 01/27/2019. The Pork Cutout Index declined and is at 77.40 as of 01/28/2019.
The April Live Cattle opened higher, up-ticked to 121.55 for the session high then grinded lower the rest of the session. It made the low at 120.125 and settled nearby at 120.225. A failure from settlement could see price test support at 119.15. Support then comes in at 117.80. If settlement holds a test of resistance at 120.70 and then 121.90. Cash trade took place in Kansas at 122.00 on a live basis. Boxed Beef cutouts were mixed on light to moderate demand and moderate offerings. Choice cutouts increased 0.67 to 213.52 while select was down 0.23 to 211.93. The choice/ select spread widened to 1.59 and the load count was 127. Slaughter was estimated to be 123,000.
March Feeder Cattle also opened higher and traded up to its high early in the session at 136.225. This is below resistance at 136.75. It fell and traded to a new low for the down move at 134.575. It settled nearby at 134.975. If settlement holds, price could test resistance at 135.60 and then 136.75. Resistance then comes in at 138.95. A breakdown below settlement could see price test support at 134.25 and then 133.50. The Feeder Cattle Index dipped and is at 143.59 as of 01/28/2020.
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.