April Feeder Cattle and April Live cattle consolidated within yesterdays trading ranges. If April
Feeder Cattle breaks down below 143.75, a test of support is possible at 142.425. Support then comes in at 140.775. If 143.75 hold, more consolidation is possible. If April Live Cattle breaks down below 125.80, a test of support at 124.30 is possible. The rising 100 DMA is at 123.31. April Lean Hogs rallied strong early in the trading session to 66.075, a new high for the up move. It stopped just shy of resistance at 66.55. A reversal took place and it tumbled, trading down past support at 63.325 to the session low at 63.15. It settled at 63.475, just above support. If it trades below todays low, follow through to the down side could see price test support at 61.80. If support hold consolidation within Wednesdays range is possible. We are seeing early trading in the negotiated cash market as trades are occurring today at 127.00 in the Southern Plains and Nebraska. A small amount of trades were made yesterday between 126.00 to 128.00 on a live basis and 204.00 to 205.00 on a dressed basis. Cutout prices stalled today with choice up 0.02 to 228.24 and select down 1.07 to 219.28. There was light to moderate demand and light offerings. The choice/ select spread widened to 8.96. There were 118 loads. Slaughter dipped to 115,000; bringing the weekly total to 354,000. The Lean Hog Index is at 52.38 as of March 11, 2019. The futures rally may have overextended itself due to wide disparity between cash and futures. The index seems to have found a bottom, but needs to keep moving higher to justify the rally in the futures contract, in my opinion.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 14th at 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.