Live Cattle
On Monday, April 16, 2018, the June Live Cattle contract opened strong as it gap opened higher and rallied to the session high at 105.95. It stopped just short of resistance at 106.025. It consolidated and then broke down hard, closing the gap (Friday high 104.375 – Monday open 104.825), on its way to the low at 103.925. It settled nearby at 104.175. A break down below the low could see price test support at 103.00 and then 101.625. If price can rally above the Monday open, a retest of resistance is possible. On Monday negotiated cash trade was at a standstill in all major feeding regions. Monday afternoon beef cutout values were lower on Choice and steady on Select on light to moderate demand and moderate offerings. Choice was down 0.82 at 211.79 with Select up 0.07 to close at 199.98 on 116 loads. The choice/ select spread narrowed to 11.81. The hide and offal value from typical fed cattle for today was estimated at 9.73 per cwt live, unchanged from Friday’s value. The estimated cattle slaughter for Monday was reported at 116,000.
Feeder Cattle
The May Feeder Cattle contract opened strong (141.40) and raced to resistance at 142.45, making the high just above it at 142.65. It also consolidated during the mid-day trade and then broke down during the last hour of trading. It traded past support at 140.775 on its way to the low at 140.075. It settled at 140.375. A break down below the Monday low could see price test support at 138.95. A recovery above 140.775 could see price revisit the Monday high.
Lean Hogs
The June Lean Hogs contract opened at 77.40 and broke down to the morning low at 76.475, before reversing and rallying to the session high at 78.075. It couldn’t take out the Friday high at 78.10 and in an about face broke down and made a new low for the day at 76.40. It settled at 76.80. A break down below the low could see price test support at 75.625. A recovery from the low could see price consolidate within the Monday range.
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.