Live Cattle
The August Live Cattle opened (118.25) stronger on Thursday, July 13, 2017 and traded to the high of the day at 118.50. This was just above the 100 DMA (118.15) and the pull from the moving average was just too great for the market to remain above it. Price broke down and traded to the early session low of 117.20. A rebound from here took price back to the opening trade and then the August contract dropped to a new low for the day at 117.10. A valiant attempt was made from the low to take out the early session high but it failed at the high and traded down to test the low at the end of the session, getting to 117.375. The session ended at 117.85 in a quiet choppy trading session. It formed a small bodied candle showing the difficulty in besting the 100 DMA to the upside. The 100 DMA remains the pivot and trading above it could take price up to trendline resistance at 119.325. A breakout above the trendline could lead to a test of the 50 DMA at 120.60. A failure from the 100 DMA could lead to a test of the support area from 116.225 to 115.75. Cash mostly disappointed today as it traded at 120 for live cattle and 190 for dressed. This is the area that got traders excited yesterday, but hope was for trades to take pace above these levels to 122 and 192. Early cash trades on Friday could dictate where futures attempt to trade. Boxed beef cutout values didn’t help futures as they were lower Thursday afternoon on light to moderate demand and heavy offerings. Choice cutouts were down $2.84 to $209.85 and select down $1.47 to $197.26 on 256 loads. The choice/ select spread is at $12.59. Thursday’s estimated slaughter is 118,000, lower than last week’s 120,000 and above last year’s 107,000.
Feeder Cattle
The August Feeder Cattle contract saw much stronger price action as the strong open (152.50) led to a test of resistance up at 154.25, reaching 154.575. It failed from here and ended the session at 153.525. Resistance remains at 153.70 and then 154.25. A breakout above 154.25 could see price test resistance at 156.025. Support is at 151.75 and then 149.975.
Lean Hogs
The August Lean Hogs remain locked between resistance at 83.80 and support at 82.375. Thursday’s range was 83.925 for the high and 82.225 for the low. A ledge has formed within this range and a breakout above resistance could see price test 84.825 and then 85.375. A breakdown below support could lead to a test 81.475 and then 80.45.
For those interested I hold a weekly livestock webinar on Friday, July 14 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.