Live Cattle
The February Live Cattle contract held the 124.75 support level Monday morning as an early morning attempt to break lower failed. The February contract held the Friday low (124.35), during the first half hour of trading as it matched the low and then proceeded to take out the 125.50 resistance level making a high at 126.275. It ended the day above resistance at 125.95. Follow through buying above the Monday high could take price to the 127.15 – 128.30 resistance zone. Trading below 125.50 could take price to support at 124.75 and then the rising 8 DMA (124.125). A breakdown below here could lead to a test of support at 123.125. The negotiated cash trade was quiet. Monday afternoon boxed beef cutout values were lower on Choice and Select on light to moderate demand and offerings. Choice was down 1.42 to 209.57 and Select was down 0.57 to 187.28 on 92 loads. The choice/ select spread narrowed to a plus 22.29. The estimated cattle slaughter for Monday was reported at 118,000.
Feeder Cattle
The January Feeder Cattle contract tested the 152.30 support level early Monday morning making the low of the day at 152.775. It recovered from here and it rallied past the 153.70 and 154.25 resistance levels, reaching the high at 155.125. It ended the session just below the high at 154.775. It is right at the 50 DMA (154.875). A rally above the 50 DMA could lead to a test of the 156.025 – 156.175 resistance zone. Aggressive short covering above this zone could lead to the 158.10 resistance level. A breakdown from the 50 DMA could take price down to the 153.70 – 154.25 support zone.
Lean Hogs
The February Lean Hogs contract rallied past the 69.90 resistance level and approached the 200 DMA (70.325), making the session high just below at 70.225. It ended the day just below the high and 200 DMA at 70.20. A break out above the 200 DMA could lead to a test of the August 16 high at 71.325. Resistance then comes in at 72.90. A failure from the 200 DMA could see price test the 69.90 support level and then 68.50.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, November 30 at 3:00pm. 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
888.391.7894
Fax: 312.256.0109
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.