Live Cattle
The October Live Cattle contract consolidated within Tuesday’s trading range on Wednesday, September 6, 2017. Bears couldn’t take price down below the Thursday low (104.20), but bulls couldn’t sustain rallies as each attempt was sold. Resistance is at the declining short-term moving averages (the 8 DMA (105.90), 13 DMA (106.10) and the 21 DMA (106.75)). The session high was 105.45. A rally above the high could lead to a test of resistance. A break down through the Thursday low (104.20) could see a test of support at 103.00. The fedcattleexchange.com auction took place with 1,240 head for sale. Sadly there were few cattle sold. The one trade for live that took place at 103.25 was passed over by the producer. There was one sale for dressed at 163.00; with 125 head sold. Packers wouldn’t participate on minimum bids at 104.00 for live and 168.00 for dressed. The negotiated cash market was quiet. Wednesday afternoon boxed beef cutout values were higher on Choice and Select on moderate to fairly good demand and moderate offerings. Choice was up 0.48 to 192.93 and Select down 0.20 to 190.67 on 168 loads. The choice/ select spread widened to 2.26. The estimated cattle slaughter for Wednesday was reported at 116,000.
Feeder Cattle
The October Feeder Cattle rallied off its early low (142.225), grinding higher throughout remainder of the session and reached a high at 144.075. It ended the day at 143.975. It closed above the short-term moving averages (the 8 DMA (143.70), the 13 DMA (142.625), and the 21 DMA (142.80)) and the 143.50 support/ resistance level. A rally above the Wednesday high could lead to a test of resistance at 146.20. A break down from the August 30 low (141.90) could lead to a test of support at 140.775. A break below here could see price erode and test the 138.95 support level.
Lean Hogs
The October Lean Hogs contract spent the session consolidating near the Tuesday high. It formed an inside candle with the high at 64.35 and the low at 63.25. A breakout above the high could see the 64.90 level tested and then the 21 DMA at 65.05. Resistance then comes in at 66.75. A break down through the low could see a test of support at the short-term moving averages (the 8 DMA (62.05) and the 13 DMA (62.925). Support then comes in at 61.80.
For those interested I hold a weekly livestock webinar on Friday, September 8 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.