On Friday April 20, 2018, the June Live Cattle contract broke down early in the trading session. It traded all the way down to the 101.625 support level where it stopped going down. An impressive short covering rally followed with price rallying all the way up past resistance at 103.00 to the high of the day at 104.00. It formed a hammer candlestick. It is at the 104.20 – 104.85 resistance range, which if broken, could lead to a test of resistance at 106.025. A break down below the 103.00 support level could see price revisit support at 101.625. Negotiated cash trade for the week ranged from 119.00 – 124.00 for live cattle and 193.00 – 195.00 for dressed. Friday afternoon boxed beef cutout values were firm to higher on light to moderate demand and moderate to heavy offerings. Choice was up 0.64 at 211.98 with Select up 1.65 to close at 200.13 on 142 loads. The choice/ select spread narrowed to 11.85. Estimated cattle slaughter for Friday is 114,000. The Cattle on Feed report came out after the close on Friday afternoon and was in line with expectations. Cattle on Feed came in at 107.00, Placements at 91.00, and Marketings at 96.00.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, April 26 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.
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Senior Market Strategist
Walsh Trading, Inc.
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.