Live Cattle
On Tuesday, April 10, 2018, the June Live Cattle contract tested the 104.20 – 104.85 resistance range, reaching 104.20 for the high of the day. Once again resistance held and Live Cattle plummeted to the low, trading down to 101.675’ just above support at 101.55. It settled near the low at 102.10. A breakdown on Wednesday below the Tuesday low could see price test support at 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 Tuesday negotiated cash trade was at a standstill in most major feeding regions. Tuesday afternoon boxed beef cutout values were lower on light to moderate demand and moderate to heavy offerings. Choice was down 1.53 at 213.51 with Select down 1.81 to close at 201.33 on 163 loads. The choice/ select spread narrowed to 12.18. The hide and offal value from typical fed cattle for today was estimated at 9.78 per cwt live, unchanged from Monday’s value. The estimated cattle slaughter on Tuesday was reported at 119,000.
Feeder Cattle
The May Feeder Cattle contract attempted to rally early in the trading session reaching the 21 DMA (137.65) for the high before once again plunging to the low of the day at 134.325. The low is just above the 134.25 support level. It settled at 135.275. Trading below the low could see price test support at 133.30 and then 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 rallied early in the session, making the high at 77.00. It couldn’t reach resistance at 77.80 and broke down through support at 75.625 and traded to the low of the day at 74.925. It settled nearby at 75.05. A break down below the low could see price test support at 74.25.
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.