The August Lean Hogs contract continued its consolidation within Mondays trading range. The high was 77.00 and the low 74.525. It settled at 75.475. A failure from settlement could see the 74.25 support level revisited. This is also the Tuesday low. A failure from here could see price approach the 72.80 support level. If settlement holds then a test of resistance at 77.80 is possible. Resistance then comes in at the declining 8 DMA now at 78.846. The Lean Hog Index declined and is at 78.31as of June 24th. The pork cutout index fell to 76.94 as of June 25th. The quarterly Hogs and Pigs report will be released after the close (2pm CST) on Thursday June 27th.
August Live Cattle broke out above the 104.20 104.85 resistance area, almost going up limit on the day. It touched just above the 106.025 resistance level at 106.10 before dipping lower and settling at 105.375. Continued strength could see price test resistance at 107.30. Resistance then comes in at 108.65. If price fails at settlement a retest of the 104.85 104.20 support area is likely. The cash market was quiet. Boxed beef cutouts were mixed as choice cutouts were up 0.06 to 219.70 and select was down 0.39 to 198.56 on light to moderate demand and moderate offerings. The choice/ select spread widened to 21.14 and the load count was large at 156. Slaughter was 121,000 for the third day in a row.
August Feeder Cattle surged higher, setting the pace for the livestock market. It traded up limit and settled up limit at 135.825. Settlement was above the 135.60 resistance level and aggressive short-covering could see price test resistance at 136.75 and then the June 18th high at 138.50. If price fails at settlement, consolidation within the Wednesday range is likely. The Feeder Cattle Index ticked higher to 131.51 as of June 25th.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 27that 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.