Live Cattle
On Wednesday, April 18, 2018, the June Live Cattle contract consolidated between support at 104.85 and resistance at106.025, with the range at 104.95 low to 105.975 high. Trade was also within the prior 2 trading days ranges, forming an inside candlestick and also a narrow range day. It had the smallest range of the prior 7 sessions. This could set up a break out move. A rally above the high could lead to a test of resistance at 108.65. A break out below the low could lead to a test of support at 104.20 and then 103.00. Negotiated cash trade on Wednesday was inactive on very light demand in all major feeding regions. Wednesday afternoon boxed beef cutout values were weak to lower on light to moderate demand and heavy offerings. Choice was down 0.49 at 211.64 with Select down 1.01 to close at 198.57 on 169 loads. The choice/ select spread widened to 13.07. The hide and offal value from a typical slaughter steer for today was estimated at 9.76 per cwt live, up 0.07 when compared to Tuesday’s value. Estimated cattle slaughter for today is 119,000, last week 119,000 and a year ago 116,000.
Feeder Cattle
The May Feeder Cattle contract continued its consolidation within the Friday and Monday ranges. It was also within the Tuesday range. It had the smallest range (140.00 low – 141.40 high) of the past 7 sessions. It is hanging around the 140.775 key level as it settled at 140.675. A breakout above the high could see price move past the 142.425 resistance level and test resistance at 143.50 and then the 100 DMA (144.225). A break down below the low could see price test support at 138.95 and then 136.75.
Lean Hogs
The June Lean Hogs contract broke out to the upside and rallied strong; past resistance at 77.80 and 78.425 on its way to the high at 78.95. It settled at 78.525, above resistance. A continuation higher could see price test resistance at 79.775 and then 80.30. A pullback could see price consolidate within the Wednesday range.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, April 12 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.