June Lean Hogs grinded higher today, besting resistance at 90.45 and then the May 7th high (91.35) was taken out on its way to 92.00 the session high. It settled at 91.825 below resistance at 92.375. It is the highest close since May 3rd as it closed the gap from the low (91.975) on that day to the May 7th high. Continued strength could see the 93.50 resistance level tested. An inability to rally past 92.375 could see price revisit support at 9045. The Lean Hog index is at 83.27 as of May 13th and the pork cutout index continues to move higher and it is now at 86.96 as of May 14th.
June Live Cattle inched out another new low for the down move making the session low at 109.20. It was a quiet session that resulted in a narrow range candle. It is the smallest range of the past 6 sessions and could lead to increased volatility going forward. A weak open could see price test support at 108.65. Support then comes in at 107.30. Another attempt to recover could see price test resistance at 110.80 and then the Tuesday high. The cash market traded at 117.00 on a live basis as packers able to work prices lower. Boxed beef cutouts continue to move counter-seasonally. Choice cutouts were down 0.55 to 219.57 and select fell 0.93 to 208.04 on light to moderate demand and moderate offerings. The choice/ select spread widened to 11.53 and the load count was 143. Slaughter was 121,000.
August Feeder Cattle made a new low for the down move, trading down to the session low at 141.175. It rebounded and settled at 142.275. It settled just below support at 142.40. Continued weakness could see price test support at 140.775. Support then comes in at 138.95. If the 142.40 support level holds, price could retest resistance at 143.50 and then 144.20. The Feeder Cattle Index continues to move lower as it came in at 134.77 as of May 14th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, May 16that 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.