Live Cattle
On Tuesday, April 17, 2018, the June Live Cattle contract opened (104.25) at the session low and raced to the high (106.175) of the day. This is higher than Monday’s high (105.95) and in a near repeat of yesterday’s trade broke down towards the low. It stopped just short of the low and then recovered, settling at 104.90. This is above the 21 DMA (104.40). This is a positive for the price action, even though it closed in the lower part of the day’s range. It also traded above the 106.025 resistance level. This is also a good sign for the market. If cattle can continue to press against resistance it could hold onto the gains and make its wat towards resistance at 108.65. A failure from the Tuesday low could see price test support at 103.00. On Tuesday negotiated cash trade was at a standstill in all major feeding regions. Tuesday afternoon boxed beef cutout values were firm on Choice and weak on Select on light to moderate demand and moderate to heavy offerings. Choice was up 0.34 at 212.13 with Select down 0.40 to close at 199.58 on 128 loads. The choice/ select spread widened to 12.55. The hide and offal value from typical fed cattle for today was estimated at 9.69 per cwt live, down 0.04 from Monday’s value. The estimated cattle slaughter on Tuesday was reported at 120,000.
Feeder Cattle
The May Feeder Cattle contract consolidated within the Friday and Monday ranges. It couldn’t take out the Monday high (142.65) as the high was 141.85. Resistance remains at 142.45. It couldn’t trade below the Friday low (139.425), making the low at 139.525. It settled at 140.25. This is below the key level at 140.775. A break down below the Friday low could see price test support at 138.95. A recovery above 140.775 could see price revisit the Monday high.
Lean Hogs
The June Lean Hogs contract consolidated between the key levels at 76.225 and 77.80. The range was 77.425 high to 76.30 low. It settled at 76.75. It could continue to trade within these levels on Wednesday. If it breaks down below 76.225, however, it could test support at 75.625 and then head towards 74.125.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, April 12 at 3:00 pm. 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.