The December Lean Hogs staged a strong rally on Monday, October 15, 2018, trading up to 57.60 before retracing and settling at 56.75. It back in the middle of the 53.825 – 59.95 trading range. The pork cutout index (79.15) and the lean hog index (68.99) remain firm showing the cash market is holding up well and with the December futures trading at a discount to the cash market it, futures are finding support after testing the low end of the trading range on Thursday. The African swine fever remains a problem as more cases continue to be found in China. There was a discovery of the disease on a 20,000 pig farm which is the largest farm to have the disease, showing that this isn’t just a small farm disease. The larger farms are supposed to have better controls in place then the smaller farms. With the disease found in a larger farm, worries will continue to grow that this disease will spread and potentially devastate the Chinese herd. They are by far the world’s largest producer of hogs. They still need to import hogs in the best of times. How desperate will they get as this disease continues to spread? The disease continues to spread outside of China. Hungary has found 50 cases of the disease. It is in other Asian and European countries with no signs of slowing. Resistance in Hogs is at 57.025. Another push above here could see price test the upper end of the trading range. Support is at the lower end of the range.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, October 18h at 2:30 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.