The December Lean Hogs broke out above the 58.65 – 53.825 trading range on Monday October 1, 2018. It traded to a new high at 59.95, just below resistance at 59.975. It settled nearby at 59.85. Traders bid up the market as a wave of potential bullish news hit the market, in my opinion. There were more cases of African swine fever found in China along with a case of Bird Flu over the weekend. The US and Canada solved their differences and on Sunday Canada agreed to join the trade deal with the US and Mexico. With this agreement moving forward, the US can now focus on Europe, Japan and China. Traders view this as positive for Hogs as China’s disease issues could force them to the negotiating table as their need to bring more Hogs into the country grows. I think buying a pullback in Hogs to the 58.25 support level is a prudent strategy for conservative traders. Aggressive traders can buy a breakout above the 59.975 resistance level. The objective is for price to test the 61.80 and possibly the 63.325 resistance levels. Place your stop according to your account size and risk tolerance.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, October 4th 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.