Live Cattle
On Wednesday May 30, 2018, the August Live Cattle contract staged a dramatic rally, going up limit with its high at 104.45. The limit move took price into the 104.20 – 104.85 resistance band. Follow through to the upside could lead to a test of resistance at 106.025. Resistance then comes in at 107.35. An inability to continue higher could see price consolidate within the Wednesday range. Negotiated cash trade on Wednesday was mostly inactive on light demand in all major feeding regions. Wednesday afternoon boxed beef cutout values were firm to higher on moderate to fairly good demand and moderate offerings. Choice was up 1.12 at 228.68 with Select up 0.73 to close at 204.38 on 153 loads. The choice/ select spread widened to 24.67.The hide and offal value from a typical slaughter steer for today was estimated at 9.58 per cwt live, unchanged when compared to Tuesday’s value. Estimated cattle slaughter for today is 118,000, last week 119,000 and a year ago 119,000.
Feeder Cattle
The August Feeder Cattle contract followed Live Cattle higher, breaking out above the 200 DMA (146.70) and surging to the high at 148.825. This is just below the April 30th high at 149.075. Resistance for Thursday is the April 30 high, and then 149.975. A breakout above here could see price test resistance at 150.90. Resistance then comes in at 152.30. A failure at 149.975 should see price consolidate within the Wednesday range.
Lean Hogs
The July Lean Hogs contract continued its onslaught of higher prices. It rallied to resistance at 80.30, reaching a high of 80.25. Aggressive buying above 80.30 could see price move towards the 82.65 resistance level. An inability to continue higher should see consolidation within the Wednesday range (80.25 – 78.825).
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, June 1st 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.