Live Cattle
On Monday, April 9, 2018, the June Live Cattle contract tested the 104.20 – 104.85 resistance range, reaching 104.60 for the high of the day. Once again resistance held and Live Cattle plummeted to the low, trading down to 102.10. It settled near the low at 102.50. A breakdown on Tuesday below the Monday low could see price test support at 101.55 and then 99.65. Traders can buy a break down to the middle of last Wednesday’s range (99.85), targeting resistance levels at 101.55, 103.00 and then the resistance zone mentioned above. Place stops according to your account size and risk tolerance. On Monday negotiated cash trade was at a standstill in all major feeding regions. Monday afternoon beef cutout values were firm on Choice and sharply lower on Select on light to moderate demand and offerings. Choice was up 0.73 at 215.04 with Select down 2.46 to close at 203.14 on 79 loads. The choice/ select spread widened to 11.90. The hide and offal value from typical fed cattle for today was estimated at 9.79 per cwt live, down 0.02 from Friday’s value. The estimated cattle slaughter for Monday was reported at 118,000.
Feeder Cattle
The May Feeder Cattle contract made an early attempt to test resistance (138.95), reaching the session high at 138.575. It failed and plunged to the low of the day at 135.025. It settled at 135.525. Trading below the low could see price test support at 134.25, then 133.30 and 132.00. I would be a buyer of the breakdown towards 132.00, as this would be a retracement to the middle of the April 4th range (132.175). I would target 133.30, 134.25 and then 135.625. Place stops according to your account size and risk tolerance.
Lean Hogs
The June Lean Hogs contract tested support (72.875) early in the session, making the low at 72.70. It rocketed higher from the low, going up limit with the high at 76.275. It settled nearby at 75.875. Aggressive traders could buy a break out and look for price to test resistance at 77.80 and then 78.475. If price can’t hold a rally, consolidation within the Monday range is likely.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, April 12 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.