Livestock Report

Ben DiCostanzoGeneral Commentary

The July Lean Hogs contract stayed within Monday’s trading range. It was a choppy trading session with price ending higher on the day. The rally couldn’t get above the 8 DMA (86.471) making the high at 86.40. A breakout above the 8 DMA could see price test resistance at 87.06. Resistance then comes in at 88.325. A break down from the 8 DMA could see price test support at 85.375 and then 83.325. The Lean Hog Index declined and is at 80.90 as of June 3rd and the pork cutout index dipped to 83.48 as of June 4th.

   August Live Cattle grinded higher, making the session high at 105.30. It was also stymied by the 8 DMA which is just above the high at 105.353. It settled at 104.675. A breakout above the 8 DMA could see price test resistance at 106.025 and then the 13 DMA now at 106.686.  A failure from the 8 DMA could see price test support at 104.20and then 103.00. The cash market has traded today with sales from 110.00 – 114.00 on a live basis.  A small amount traded at 183.00 on a dressed basis. Boxed beef cutouts were lower as choice cutouts were down 0.89to 222.11 and select down 0.03 to 207.18 on light to moderate demand and moderate to heavy offerings. The choice/ select spread narrowed to 14.93 and the load count was 173. Slaughter was 119,000.

  August Feeder Cattle followed through to the upside today taking out the Friday high (138.975) reaching 139.65 for the session high. The market reacted to the price action in corn, moving to the downside when corn rallied and moving higher when corn traded lower. Corn ended the day on its lows and feeder cattle ended the day on its highs. It settled at 139.45. Continued strength could see price test resistance at the upward sloping trendline at 140.25 for Thursday. Resistance then comes in at 140.775 and then the downward sloping 21 DMA at 141.914. A failure from settlement could see test support at 138.95. Support then comes in at 136.75. The Feeder Cattle Index fell to 131.88 as of June 4th.

For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 6th 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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**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 LOSSTHE 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.