Live Cattle
On Wednesday May 16th, 2018, the June Live Cattle contract opened (102.50) lower, traded to the early low at 102.15 and then rallied to the session high at 103.75. It failed and broke down, trading to the low of the day at 101.65. It settled at 101.825. This is just above support at 101.625. A break down below support could see price test support at 100.275. Support then comes in at 99.35. If the Wednesday low holds price should consolidate within the range. Resistance is at 103.00 and then 104.20. Negotiated cash trade on Wednesday was limited on light demand in all major feeding regions. Wednesday afternoon boxed beef cutout values were weak to lower on light to moderate demand and moderate offerings. Choice was down 0.61 at 231.03 with Select down 1.01 to close at 208.50 on 134 loads. The choice/ select spread widened to 22.53. The hide and offal value from a typical slaughter steer for today was estimated at 9.75 per cwt live, down 0.05 when compared to Tuesday’s value. Estimated cattle slaughter for today is 118,000, last week 118,000 and a year ago 116,000.
Feeder Cattle
The August Feeder Cattle contract opened at 138.10, traded up to the high of the day at 138.90, which is right at resistance (138.95) and then traded lower the rest of the day. It traded through support at 136.825 on its way to the low at 136.55. It settled below support at 136.725. A continuation to the downside could see price test support at135.60. Support then comes in at 134.225. A bounce of the Wednesday low could see price consolidate within the range.
Lean Hogs
The June Lean Hogs contract consolidated within the Tuesday range, trading with a high at 76.025 and a low at 74.75. It formed an inside candle. A rally above the high could see price test resistance at 77.80 and a breakdown below the low could see price test support at 74.125 and then the 50 DMA at 73.725.
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.