Dennis Smith from Archer Financial Services, October 15th 2020

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MORNING LIVESTOCK REPORT   By Dennis Smith  

312-242-7905  October 15, 2020 

LEAN HOGS: 

Pork packers improved their margin nicely yesterday with cash lower and cutout higher and reaching a new high for the current move. Butts have developed some weakness this week but otherwise I don’t see any cracks in the armor. Technically, Oct hogs expired on their highs and now Dec will pick up where Oct left off. However, Dec hogs are $10 under the Oct. We may witness a very quick $8 to $10 move upward in Dec futures. Open interest was up over 2,400 cars which is bullish. Weekly export data will not be released until tomorrow due to the holiday on Monday.  

LIVE CATTLE: 

While open interest is rising in hog futures as prices rise, open interest is dropping like a stone in live cattle futures and the charts are rolling over…bearish. Total open interest from yesterday was down 1,600 cars and stands at 273,226. Record high OI in live cattle, from earlier this year, stands at 400,453. This “trend” is expected to continue pressing and depressing live cattle futures lower. Cash trade was established everywhere yesterday at 108 and at $169. It appears the $1.09 trade that occurred Monday in TX is the high for the week and possibly, quite possibly the high for a while. Jan FC closed into a new recent low yesterday. Most active Dec LC has settled below key moving averages in two out of the last three sessions. A close below 11000 will be the nail in the coffin. We like establishing bearish option positions for both spec and hedge player.

For a free 30-day trial to the evening livestock wire which includes a morning livestock report and midday pork and beef update, send an email to: dennis.smith@archerfinancials.com 

The risk of loss in trading futures and options on futures can be substantial. The author does not guarantee the accuracy of the above information, although it is believed that the sources are reliable and the information accurate. The author assumes no liability or responsibility for direct or indirect, special, consequential or incidental damages or for any other damages relating or arising out of any action taken as a result of any information or advice contained in this commentary. The author disclaims any express or implied liability or responsibility for any action taken, which is solely at the liability and responsibility of the user. This report is a solicitation.

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