Live Cattle
The October Live Cattle contract broke down and tested support on Tuesday, September 12, 2017. It fell below the Monday low and traded down to a low at 106.00, just below support (106.20). A trade below here on Wednesday could see the 104.875 support level tested. Support then comes in at 103.00. A breakout above the 107.95 high could see price test the 108.675 resistance level. Continued strength could see movement towards the 110.80 resistance level. The negotiated cash market was quiet. Wednesday will see the fedcattleexchange.com auction with 1,063 head for sale and this could jump start the cash trade. Tuesday afternoon boxed beef cutout values were lower on Choice and higher for Select on light to moderate demand and heavy offerings. Choice was down 0.77 to 190.79 and Select up 0.48 to 190.86 on 163 loads. The choice/ select spread narrowed to -0.07. The estimated cattle slaughter for Wednesday was reported at 117,000.
Feeder Cattle
The October Feeder Cattle approached the 149.975 resistance level, reaching a high at 149.875. It formed an outside day candle, as the Tuesday range was wider than the Monday session. The 100 DMA (148.35) was tested with the low at 148.15. The outside day candle ended up as a Doji, showing the difficulty in fighting the support and resistance levels. A rally above the 149.975 resistance level could see price test the 151.725 high from August 3rd and then the 152.30 resistance level. A break down below the 100 DMA could see support tested at 146.20.
Lean Hogs
The October Lean Hogs contract gap opened lower and traded through support at the 60.225 trendline and 59.825 levels. It made the session low at 59.225. Continued weakness could see support tested at 58.10. A breakout above the Tuesday high (60.925) could see price close the gap at 61.25 (Monday low). Resistance then comes in at 61.80.
For those interested I hold a weekly livestock webinar on Friday, September 15 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.