Commentary:
LIVE CATTLE
The cattle opened lower today. The close was locked limit. Look for follow through. The expanded limits after yesterdays close did not help. The talk of discount to cash means little to the market. It should be remembered that it has rarely of late. The weights remain high during a difficult time. The consumer is spent after restocking. This sounds like a broken record from yesterday but the fundamental picture is tied to the reality. The issue the Live market has is the recent lack of interest in the Feeder market. This could force lower liquidation. The technical action today put LC back below the 14,21 MA.
FEEDER CATTLE
The feeder market is fueled today by the wholesale beef prices in retreat. The retail demand in retreat. The Oklahoma City Feeder Auction showed sales off $4-$10 this week. This could be the near term trend. The technical action in FC traded back below the 14,21 day MA.
HOGS
The hogs, like beef, locked limit. As mentioned yesterday the fundamentals and the technicals all are pointing lower. The demand story has turned to oversupply and the question is what is enough decline. The overall cash prices are weak . The cutout price are monthly lows. The near term trend looks to be lower. There are recent developments in China that indicate the ASF is back and of concern. This is a tough thought as some of this advanced pork production has put the producer in the position we sit today. The tech for hogs remains extended down well below the 14,21 MA. This indicates the tech does not offer any thoughts for support at present.
Trade Suggestion(s)
NA today
Risk/Reward
Futures-
Options –
BE WELL,
John J. Walsh
President, Walsh Trading, Inc.
800-993-5449
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