Live Cattle
The June Live Cattle contract made yet another new low for the down move, trading to a low of 104.70 on Monday, March 26, 2018. The breakdown in the market took place after an early rally took Live Cattle up to the high at 107.30, which is the half way point of Friday’s range. The rally exhausted itself here as sellers once again took control of the price action. The low of the day is at the 104.85 -104.20 support area and could be the key to trade on Monday. A break down below support and price could test the 104.85 – 104.20. A break down from here could lead to a test of the 103.00 support level. If support holds a rally towards resistance at 106.025 is possible. Negotiated cash trade on Friday was at a standstill in all major feeding regions. The Cattle on Feed report showed cattle on feed March 1st at 109 percent, February placements at 107 percent and February marketings at 102 percent. On Monday negotiated cash trade was at a standstill in all major feeding regions. Monday afternoon beef cutout values were weak to lower on light to moderate demand and moderate offerings. Choice was down 0.56 at 222.53 with Select down 0.94 to close at 215.46 on 95 loads. The Choice/ Select spread widened to 7.07. The hide and offal value from typical fed cattle for today was estimated at 10.09 per cwt live, unchanged from Friday’s value. The estimated cattle slaughter for Monday was reported at 117,000.
Feeder Cattle
The May Feeder Cattle contract rallied early and tested the December 22nd low at 138.30. The high was right at the price and this also failed. It broke down and made another new low (135.40) for the down move. This is right at support at 135.60. A break down from here could lead to a test of support at 134.25. Support then comes in at 133.30. If price can hold the 135.60 level, a rally to 136.75 is possible.
Lean Hogs
The June Lean Hogs contract rallied from the open and traded up to resistance at 75.625, making the high just above it at 75.725. Another rally, another failure. Price broke down and traded to the low of the day at 74.025. It remains at the key level (74.125). A break down from here could revisit the Friday low (73.225). Support then comes in at 72.875. Resistance remains at 75.625.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, March 29th 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
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.