Live Cattle
The October Live Cattle contract rallied at the open and tested the 108.675 resistance level on Thursday, September 14, 2017. It reached a high at 108.90 before failing and trading down to a low at 106.625 and then ending the day at 107.05. The breakdown approached support at the short-term moving averages (the 8 DMA (106.475), the 13 (106.375) and the 21 (106.50)), but stopped just above them. It also is above horizontal line support at 106.20. A trade below the 106.20 support level could see the 104.875 support level tested. Support then comes in at 103.00. A recovery from the low could see price revisit the 108.675 resistance level. A breakout above it could see price move towards the 110.80 resistance level. The negotiated cash market was quiet. Thursday afternoon boxed beef cutout values were higher on Choice and lower for Select on light to moderate demand and heavy offerings. Choice was up 0.60 to 191.00 and Select down 1.97 to 186.72 on 199 loads. The choice/ select spread popped to a plus 4.28. The estimated cattle slaughter for Thursday was reported at 118,000.
Feeder Cattle
The October Feeder Cattle contract made a new high for the up move on Thursday as an early rally took price to 150.775, just above the Wednesday high (150.25). The rally couldn’t hold and price fell back below the 149.975 resistance level, trading to the session low at 148.50. The breakdown pierced through the 100 DMA (148.575), before recovering and ending the day at 149.80. It formed a Doji candle which represents indecision, showing the difficulty Feeder Cattle has 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 attempted an early rally, trading up to the high at 60.10 right at trendline resistance (60.125). It couldn’t penetrate the trendline and broke down to the session low at 58.60. Price drifted higher off the low and ended the day at 59.075. It formed a spinning top candle and continued weakness could see price break down below support at 58.10 and test the next level of support at 56.15. Support then comes in at 54.80. A breakout above the trendline 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.