Live Cattle
The December Live Cattle contract opened (115.05) below the 200 DMA (115.65) and found support at 115.00 then rallied to the high (117.375) of the day on Monday, October 19, 2017. It pulled back slightly and ended the session at 116.675, just above the key 116.55 level. If price can stay above 116.55, a test of the October 13 high (117.575) is possible. Breaking out above this level could lead to a test of resistance at 118.10 and then 119.15. If price breaks down from 116.55, we can retest the 200 DMA, and more weakness could see price test the October 18 low (114.525). The negotiated cash market was quiet on Monday. Sales in the cash market on Friday ranged from 110.00 to 112.00 for live cattle and 175.00 for dressed. Monday afternoon boxed beef cutout values lower on Choice and Select on light to moderate demand and offerings. Choice was down 0.61 to 199.25 and Select was down 0.09 to 191.05 on 86 loads. The choice/ select spread narrowed to a plus 8.20. The estimated cattle slaughter for Monday was reported at 115,000.
Feeder Cattle
The January Feeder Cattle contract gap opened (148.35) below the 50 (149.375) and 100 (149.175), down ticked to 148.175, found support and rallied to the high at 151.40. It ended the session at 150.975. Follow through to the upside could take price up to resistance at 152.30 then 153.50 and 154.25. A break down from the high could lead to a test of support at the 149.975 level and then the 50 DMA.
Lean Hogs
The December Lean Hogs contract opened (64.90) up at the 64.80 resistance level and eked out a new high for the up move, reaching 65.325 before reversing and trading down to 63.45, just above the 63.325 support level. This is also right at the 8 DMA (63.325). Breaking down from the 63.325 support level could see the rising 13 DMA (62.75) and trendline (62.60) tested. Support then comes in at the 50 DMA (62.125) and 61.80. A reversal off the 63.45 low could see price revisit resistance at 64.80 and then 66.50.
For those interested I hold a weekly livestock webinar on Thursday, October 26 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.