Livestock Report

The April Lean Hogs contract gap opened lower and broke down, going limit down for the session and settling down limit. Exceptional US production and Coronavirus fears continue to plague Hogs. Approximately 23 cities and 56 million people have essentially been quarantined as the Chinese attempt to limit its spread. And spread it has as at least 13 countries, including the US have seen people infected with the disease. With limits placed on travel there are fears of slowdowns in trade as most sectors have seen breakdowns in price. The breakdown in Hogs has taken price to support at the 21 DMA on the continuous chart at 70.32. Settlement was at 70.45. A failure at settlement could see price test support at 69.90, the 50 DMA at 69.15 and then 68.75. Support then comes in at 67.80. If support holds, consolidation within the Monday range is likely. The Lean Hog index increased and is at 61.53 as of 01/23/2019. The Pork Cutout Index increased and is at 78.04 as of 01/24/2019.

The April Live Cattle contract collapsed on Monday, going down limit as traders liquidated longs as the Coronavirus fears affected all markets. Cattle gap opened below Fridays low and panicked longs liquidated, in my opinion. Price took out the lows of its trading range (127.90 123.30) and the selling fed upon itself. It settled limit down at 121.30. If price can hold settlement, consolidation within the Monday range is likely. A failure from settlement could see price test support at 120.70 and then 119.15. Support then comes in at 117.80. Cash trade was at a standstill on Monday. Boxed Beef cutouts were lower on light to moderate demand and moderate offerings. Choice cutouts decreased 0.90 to 213.59 and select was down 0.20 to 210.50. The choice/ select spread narrowed to 3.09 and the load count was 104. Slaughter was estimated to be 122,000.

March Feeder Cattle also gap opened lower and broke down the limit for the day. It settled down limit at 135.175. Settlement was below support at 135.60. If settlement holds consolidation within the Monday range is likely. A breakdown below settlement could see price test support at 134.25 and then 133.50. The Feeder Cattle Index ticked lower and is at 144.84 as of 01/23/2020.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, January 30that 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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**Call me for a free consultation for a marketing plan regarding your livestock needs.**

Ben DiCostanzo

Senior Market Strategist

Walsh Trading, Inc.

Direct: 312.957.4163

888.391.7894

Fax: 312.256.0109,

bdicostanzo@walshtrading.com

www.walshtrading.com

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.