Live Cattle
The April Live Cattle contract gap opened higher on Monday, January 29,2018 and traded to the high of the day at 126.125, this is just below the Thursday high at 126.30. The Failure to make a new high led to a selloff which took price down to the session low at 124.80. It ended the day at 124.90. 124.70 will be the key level for trading on Tuesday, in my opinion. Holding above this level could take price back up to retest 126.30 resistance. Breaking out above here could take price to resistance at 127.15. A failure from the here could see a test of the 8 DMA at 124.075 and then support at 123.125. Trendline support is at 122.875. The negotiated cash trade was at a standstill in all major feeding regions. Monday afternoon boxed beef cutout values were sharply higher on Choice and Select on moderate to good demand and moderate offerings. Choice was up 2.28 to 209.11 and Select was up 2.30 to 204.13 on 84 loads. The choice/ select spread narrowed to 4.98. The estimated cattle slaughter for Monday was reported at 118,000.
Feeder Cattle
The March Feeder Cattle contract gap opened higher and traded up to the 200 DMA (149.225), reaching a high at 149.475. Once again the 200 DMA stopped the buying and price broke down and traded towards support at 146.025, making the low of the day just above it at 146.15. It recovered slightly off the low and ended the session at 146.95. The 147.35 resistance level will be the key level for trading on Tuesday, in my opinion. Breaking above this level could lead to a test of resistance at the declining trendline at 148.15. A break out above here could lead to a retest of the 200 DMA. A failure to stay above 147.35 could see price revisit support at 146.025. A break down below here could see a retest of support at 145.05 and then the rising 21 DMA, now at 144.625.
Lean Hogs
The April Lean Hogs contract traded between the 74.25 resistance level (high – 74.20) and 73.275, the Friday low (low -73.30. It ended the day at the session low. It formed an inside candle and a breakout above the Monday high could lead to a test of resistance at 75.70. A break out below the Monday low could lead to a test of support at 72.825. A failure from here could lead to a test of support at 71.85.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, February 3rd 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.