April Live Cattle worked its way higher today; trading up to 127.75 which is just above the Monday high (127.725). It settled just below at 127.625. Resistance remains at 128.10 and the Thursday high at 129.475. A failure from settlement could see support revisited at 126.625. Support then comes in at 125.80. Cutouts declined to show choice down 0.63 to 217.02 and select down 0.31 to 213.10 on light to moderate demand and offerings. The choice/ select spread dipped to 3.92. March Feeder Cattle consolidated within Monday’s trading range. It settled at 143.825 which is just above the 143.50 support level. Resistance is at the declining 50 DMA at 145.022. A rally above the 50 DMA could see price test resistance at 146.20. Resistance then comes in at 147.30. Trading below 143.50 could see price make its way to support at 142.40. April Lean Hogs consolidated within Monday’s range and settled at 61.60 which is below the 61.80 support level. Continued weakness could lead to a test of the Monday low at 59.65. A recovery above settlement could see the 200 DMA (63.275) and the 50 DMA (63.558) revisited.
A hedge idea for cattle producers – buy the April 124 put and sell the 131 call at even money plus commission and fees.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, February 7th 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.