Live Cattle
On Monday May 14th, 2018, the June Live Cattle contract continued to consolidate between the April 30th high (107.825) and the May 1st low (103.825). It opened at the session high (106.85) and broke down, trading all the way down limit by the end of the day. It ended the day down limit and sets a bearish tone to the Live Cattle market. It ended the session in the upper end of the 104.85 – 104.20 support zone. A break down below 104.20 could lead to a test of support at 103.00. Support then comes in at 101.625. A rally off the low could see price consolidate within the Monday range. Cash trade on Friday was disappointing as trades took place at 122.00, 4.00 lower than the prior week. Negotiated cash trade on Monday was at a standstill in all major feeding regions. Monday afternoon boxed beef cutout values are firm to higher on moderate to fairly good demand and moderate to heavy offerings. Choice was up 1.15 at 232.12 with Select up 0.43 to close at 209.12 with a spread of 23.00 on 107 loads. The estimated cattle slaughter for Monday was reported at 117,000.
Feeder Cattle
The August Feeder Cattle contract opened (142.375) below the 142.425 support level, traded up to the high at 143.00 then broke down and traded lower the remainder of the day. It traded below the 50 DMA (140.975), trendline support (140.875), and the 140.775 support level, making the low at 140.10. It ended the day at 140.475, below support and the 144.80 – 141.15 consolidation band. Follow through to the down side could see price test the 138.925 support level. Support then comes in at 136.825. A bounce of the Monday low could see price consolidate within the Monday range.
Lean Hogs
The June Lean Hogs contract consolidated within the Friday range (77.25 high to 75.825 low), trading between 76.50 and 75.35. It formed an inside candle. A break down below the Monday low could see price trade down to support at 74.125. A rally above the Monday high could see price test the May 19th high at 77.45.
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.