The October Lean Hogs continued its consolidation within last Mondays huge trading range. Mondays range was 69.90 high to 61.50 low. Todays range was 67.275 to 64.60. Settlement was 66.775. A break down from settlement could see support at 64.80 tested. A rally from settlement could see Tuesdays high (68.50) tested. The Lean Hog index fell to 80.95 as of 8/12/2019. The Pork Cutout Index ticked higher to 89.39 as of 8/13/2019.
October Live Cattle is still feeling the effects of the Tyson processing plant fire. It traded below and settled below the 99.375 support level. The settlement price was 98.50. The low was 98.40. A weaker opening could see price test support at 97.075. Support then comes in at 96.10. A bounce off of settlement could see price revisit resistance at 100.275. The cash market traded at 105.00 on a live basis in Texas and Kansas. Boxed beef cutouts surged with choice cutouts up 5.98 to 232.34 and select up 5.34 to 205.92 on good demand and moderate offerings. The choice/ select spread widened to 26.42 and the load count was 162. Slaughter was 116,000.
September Feeder Cattle recovered from yesterdays debacle, going up the expanded limit to the high at 133.95. It couldnt hold the move and pulled back and settled at 132.825. Todays move was within yesterdays range as it was the limit levels prevented any possibility of trading above yesterdays 134.225 high. A rally above todays high could see price test resistance at 134.25 and then 135.60. A failure from settlement could see more consolidation within Mondays range. The Feeder Cattle Index declined to 139.89 as of August 13th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, August 15at 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.
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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.