Live Cattle
On Thursday May 10th, 2018, the June Live Cattle contract continued to consolidate between the April 30th high (107.825) and the May 1st low (103.825). It started the day near the session low and support, opening at 105.475 and trading down to 104.975. The low is just above the 104.85 support level and buyers came in here and after a short consolidation period took price above the 106.025 resistance level and never looked back. It took out the April 30th high and traded to the new high for the up move at 108.10. It pulled back towards the 107.35 key level (107.425 Low) and settled above it at 107.525. Continued strength on Friday could see resistance tested at 108.65 and then the declining 50 DMA at 109.15. A failure from 108.10 could see price consolidate within the Thursday range. Negotiated cash trade on Thursday has been mostly inactive on light demand in all feeding regions. Thursday afternoon boxed beef cutout values are steady on light to moderate demand and offerings. Choice was up 0.11 at 231.07 with Select 0.19 lower to close at 209.14 with a spread of 21.93 on 111 loads. The hide and offal value from a typical slaughter steer for today was estimated at 9.87 per cwt live, down 0.02 when compared to Tuesday’s value. The estimated cattle slaughter for Thursday was reported at 119,000.
Feeder Cattle
The August Feeder Cattle contract traded down to trendline support (141.15) early in the trading session, making the session low right at the trendline. A strong rally late in the trading session took price above resistance at the 100 DMA (143.475), making the high at 144.425. It settled at 143.95. A rally above the Thursday high could see price test resistance at 145.05. Resistance then comes in at 146.20. A failure from the high could see price consolidate within the Thursday range.
Lean Hogs
The June Lean Hogs contract opened at 76.030 and traded to the session low at 76.075. It found support here and grinded higher the remainder of the trading session, making a new high for the up move at 77.45. It settled nearby at 77.325. A continuation higher could see price test resistance at 77.80 then 78.425. The April 19th high at 79.10 is next. A failure from the high could see price consolidate within the Thursday range.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, May 17th 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.