Commentary
The April Live Cattle gap opened lower and then traded to a new low for the down move at 115.25. It traded down limit and settled there as panic selling took hold of the market, in my opinion. Coronavirus news spread fear over the week-end as increases in virus cases made its way around the world as Italy, South Korea, Iran and others report worsening effects of the disease. This sent global equity markets into a tailspin creating negative reactions in the agricultural markets as gold soared in response to the developments. This led to the weak opening in the livestock markets and a continuation lower in the cattle markets as most Feeder Cattle markets settled down its limit too. Hogs stabilized in the back months even with the April contract nearly going down limit. A difficult day all around to put it mildly. I think the markets will continue to focus on the virus and the equity markets. The fear of demand destruction as the disease spreads and the decrease in wealth if equity markets continue to implode put the livestock markets on shaky ground. April cattle support comes in at 114.65, 113.90 and 112.35. Resistance is at 116.55, 117.80. The is a gap above from Friday’s low at 116.95 and Mondays high at 116.00. Cash trade was reported in Iowa at 116.00 on a live basis and 187.00 on a dressed basis. Trade was light. Boxed Beef cutouts were higher on moderate to fairly good demand and moderate offerings. Choice cutouts increased 1.98 to 207.07 and select was up 0.67 to 202.37. The choice/ select spread widened to 4.70 and the load count was 98. Slaughter was estimated to be 118,000.
Trade Suggestion(s):
N/A today
Risk/Reward:
Futures –
Options –
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursdays and our next webinar will be on Thursday, February 27th 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.
**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
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bdicostanzo@walshtrading.com
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