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 69.125 to 65.00. Settlement was 67.075. A break down from settlement could see support at 64.80 tested. A rally from settlement could see todays high tested. The Lean Hog index fell to 82.33 as of 8/8/2019. The Pork Cutout Index continues to make its way higher rising to 88.92 as of 8/9/2019.
Cattle markets were limit down from start to finish today as they were affected by the fire at the Tyson Foods beef packing plant in Holcomb, Kansas on Friday. Tyson said the plant which processes approximately 30,000 cattle each week will be closed indefinitely which puts this production in jeopardy. Tyson will have to scramble and move cattle around to different plants to try to keep up with demand. The cattle markets could continue to be under pressure until a clearer picture emerges with Tyson and what will they will do to process cattle. This could change the landscape for cattle as producers are current as weight and grading have been down. A prolonged shutdown could severely impact producers and drive up cutout prices which would hit consumers. Cash was quiet today. Boxed beef cutout prices were higher as choice was up 2.25 to 218.62 and choice up 3.98 to 197.79 on good demand and heavy offerings. The choice/ select spread narrowed to 20.83 and the load count was 151. Slaughter was 115,000.
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.