Live Cattle
On Monday June 18, 2018 the August Live Cattle contract opened at 104.95, traded to the low at 103.975 and then fought its way higher, grinding upwards and making the session high at the end of the day at 105.675 and settling nearby at 105.175. The settlement is just above the 104.85 resistance level. This will be the key for trade on Tuesday, in my opinion. A rally above settlement could test resistance at 106.025 and then 107.35. Breaking below the 104.85 support level could see a test of the 104.20 support level and then 103.00. On Monday negotiated cash trade was at a standstill in all major feeding regions. Monday afternoon beef cutout values were lower on Choice and higher on Select on light to moderate demand and offerings. Choice was down 0.88 at 220.71 with Select up 1.47 to close at 204.20 on 110 loads. The choice/ select spread narrowed to 16.51. The hide and offal value from typical fed cattle for today was estimated at 9.58 per cwt live, down 0.02 from Friday’s value. The estimated cattle slaughter for Monday was reported at 118,000.
Feeder Cattle
The August Feeder Cattle contract opened at 147.625, traded to its low at 146.875 then made its way higher, trading up to the high at 149.275 at the end of the day. It settled at 149.125, right at the downward sloping trendline. On Tuesday the trendline dips to 149.10. Trading above the trendline could see price test resistance at 149.975 and then 150.90. A failure at the trendline could see price test support at 148.40, 147.35 and the 200 DMA at 146.95.
Lean Hogs
The August Lean Hogs contract is now the lead contract as the volume was greater than the July contract. It opened at 78.425 and traded to the low at 78.00. The low is just above the 77.80 support level. Buyers came in and Lean Hogs rallied the remainder of the day making the high at the end of the day at 79.475. It settled at 79.425. It is just below resistance at 79.775. A rally above here could see price test resistance at 80.30 and then 81.25. A failure from settlement could see support at 78.425 tested and then 77.80.Support then comes in at 76.225.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, June 21st 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.