Live Cattle
The June Live Cattle contract opened at the Wednesday low (121.75) on Thursday May 18, 2017 trading to low of the day at 121.20, before grinding higher in choppy trade. It took out Wednesday’s high (123.45) and formed an outside day candle reaching a new high at 123.90. It stopped just above the 8 DMA at 123.775 and fell back toward Wednesday’s settlement (122.45) and ended the session at 122.975. The early decline came about as traders worried about the lack of trading in the cash market (yesterday) after the fedcattleexchange.com auction. As Thursday’s session progressed bids started rolling in. Packers bid $133.00 for live cattle in Nebraska and $210 and $212 for dressed. Then other areas became active with $133.00 bids in Colorado and $133.50 in Kansas. Iowa had sales of $134.00 for live cattle and $212.00 for dressed. Texas joined in with $134.00 bids. Sales took place in Kansas at $133.50 and $134.00. Bids for $134.00 became common in the Northern plains. The USDA released data showing dressed weights were down 15 lbs. for steers and 16 lbs. for heifers for the week ending May 6th as compared to the prior week’s report. The futures market pushed higher with this information and then higher bids of $135.00 were reported in Nebraska and dressed bids came in at $213.00. The June contract is above trendline support and tomorrow’s trade will see the trendline up at 123.45. A rally above the Thursday high could see futures test resistance at 124.65 and then 125.75. A failure from here could see a revisit of the Thursday low and then the Tuesday low at 120.575. The USDA reported late live cash trades at 135.00 and 135.50 in Nebraska. Boxed beef cutout values weak to lower on light to moderate demand and offerings. Choice was down .96 at 247.21 with Select down .27 to close at 221.66 on 114 loads. The estimated cattle slaughter for Thursday is 107,000.
For those interested I hold a weekly livestock webinar on Friday, May 19 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.
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.