Live Cattle
On Monday May 7th, 2018, the June Live Cattle contract continued its consolidation between the April 30th high (107.825) and the May 1st low (103.825). The Monday trade took place with a high of 106.275 and the low at 104.85. It settled near the low at 105.175. The high was just above the key level at106.025 and the low is at the 104.85 support level. A break out above the 106.275 high could see price test resistance at 107.35 and then the April 30th high. Resistance then comes in at 108.65. Trading below the Monday low could send price back to test support at 104.20 and then 103.00. Negotiated cash trade on Monday was mostly inactive on light demand in all feeding regions. Monday afternoon boxed beef cutout values were higher on moderate to good demand and moderate to heavy offerings. Choice was up .84 at 229.14 with Select up 1.71 to close at 211.20 on 96 loads. The choice/ select spread narrowed to 17.94. The estimated cattle slaughter for Monday was reported at 119,000.
Feeder Cattle
It was an ugly day for the August Feeder Cattle contract, breaking down from the open (146.175), high 146.225 and falling to the session low at 143.275 by the end of the day. It settled at 143.70. It is now at the lower end of the 200 DMA (147.125) resistance and 100 DMA (143.55) support band. A close below the 100 DMA could see price make its way to support at 140.775. There are some hurdles in the way to test this support level. The rising 21 DMA (142.725), the 142.425 support level and the declining 50 DMA (141.40) could see some buyers come in to the market. If the selling stalls at the 100 DMA, price could continue along its consolidating path and move towards the 200 DMA.
Lean Hogs
The June Lean Hogs contract consolidated between the Thursday high (75.425) and the Friday low (72.75), opening at 73.625, trading up to 74.875 and settling at 74.175. It is right at the key 74.125 level and price should continue to swing off this level. It would take a break out above 75.60 or below the rising 100 DMA (71.925) to give a direction to the consolidating Hogs, in my opinion.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, May 10th 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.