Live Cattle
The December Live Cattle contract rallied early in the trading session testing resistance at 116.55, making the high just below resistance at 116.325 on Tuesday, October 4. 2017. It broke down from the high and traded down to the day’s low by the end of the session at 114.875. It ended the day at 115.05. It ended up below the 200 DMA (115.575) and formed a gravestone doji candlestick. This could lead to a break down in price if we are able to trade under the session low. A break down under the low could see price test support at the 100 DMA (declining – 114.325) and then the 13 DMA (rising – 113.60). Trendline support comes in at 113.05. A reversal from the low could see a retest of the 2200 DMA and the 116.55 resistance level. Resistance then comes in at the September 22 high at 117.725. The negotiated cash market was quiet. The fedcattleexchange.com auction took place with 1,732 head for sale. Sales took place between 107.00 and 108.50. Wednesday afternoon boxed beef cutout values were lower on Choice and higher on Select on light to moderate demand and offerings. Choice was down 0.46 to 197.41 and Select up 0.53 to 189.53 on 118 loads. The choice/ select spread narrowed to a plus 7.86. The estimated cattle slaughter for Tuesday was reported at 117,000.
Feeder Cattle
The November Feeder Cattle tried to breakout to the upside but couldn’t complete the task. It rallied above the Monday high (154.775) but couldn’t make it past the September 29 high (155.55), making the session high at 155.40. It failed here and broke down to the low (153.425) at the end of the day. It ended the session just above the low at 153.75. A break down below the low could lead to a test of support at 152.30 and then the 21 DMA (151.825). A recovery from the 13 DMA (153.875) could lead to a retest of the high and then resistance at 156.025. Resistance then comes in at 159.975.
Lean Hogs
The December Lean Hogs contract traded within Tuesday’s trading range, forming an inside candle. It formed another Doji candlestick. The Doji indicates indecision and a break down from the 61.80 support level could lead to a test of support at the 21 DMA (60.125) and the trendline at 59.975. Taking out the high (62.90) could lead to a test of resistance at 63.325 and then 64.90.
For those interested I hold a weekly livestock webinar on Friday, October 6 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.