Live Cattle
On Monday June 11, 2018 the August Live Cattle contract opened at 106.25 and broke down to the early morning low at 105.175. It recovered and traded past the open to the high of the day at 106.675. It consolidated mid-session and then a late day swoon took price down past the early low on its way to the session low at 103.775. It settled at 104.175. A bearish engulfing candle formed, which could lead to lower prices. A break down below the low could see price test support at 103.00 and then 101.625. If price can hold 103.00, consolidation within the Monday range is possible. On Monday negotiated cash trade was at a standstill in all major feeding regions. Monday afternoon beef cutout values were weak to lower on light to moderate demand and moderate offerings. Choice was down 1.08 at 225.13 with Select down 0.38 to close at 202.80 on 97 loads. The choice/ select spread narrowed to 22.33. The hide and offal value from typical fed cattle for today was estimated at 9.45 per cwt live, up 0.10 from Friday’s value. The estimated cattle slaughter for Monday was reported at 118,000.
Feeder Cattle
The August Feeder Cattle contract opened at 147.80, traded down and tested support at 146.20, making the early low at 146.55. It recovered and traded to the session high at 148.425. This is right at resistance at148.40. Feeders then consolidated, before it also broke down late in the day, making the low at 145.325. It settled at 145.95. It formed a bearish engulfing pattern, which could lead to lower prices. Trading below the low could see price test support at 145.05 and then 144.20. Support then comes in at 143.50. If price can trade above 146.20, consolidation within the Monday range is likely.
Lean Hogs
The July Lean Hogs contract opened at 81.00 and traded higher, reaching the session high at 81.625. It couldn’t move any higher, consolidating and then breaking down at the end of the day to the session low at 78.625. This is just above support at 78.425. It settled at 79.40. It also formed a bearish engulfing candle. Follow through to the downside could lead to a test of support at 77.80 and then 76.225.If the recovery off the low continues then consolidation within the Monday range is likely.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 14th 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.