Live Cattle
On Friday July 13, 2018 the August Live Cattle contract consolidated in a quiet trading session as traders waited for cash to trade and the cash market waited for futures to make any kind of a move. The cash trade by the futures close had not traded as packer bids remained lower than last week’s trade and producer offerings remained above last week’s trade. We will wait for Monday to see what trades took place. The Friday trading range was 105.30 high to 103.95 low and the settlement at 104.55. The low is just above the 103.00 support level and the high below the 106.025 resistance level. A breakdown below the Friday low could see support tested at 103.00 and the 101.625. A rally above the high could see resistance tested at 106.025 and then107.35. Thus far negotiated cash trade on Friday was limited on light demand in all major feeding regions. Friday afternoon boxed beef cutout values were sharply lower on Choice and weak on Select on light to moderate demand and offerings. Choice was down 2.44 at 204.14 with Select down 0.64 to close at 196.37 on 81 loads. The choice/ select spread narrowed to 7.77. The hide and offal value from typical fed cattle for today was estimated at 9.18 per cwt live, down 0.39 from Thursday’s value. The estimated cattle slaughter for Friday was at 118,000 head with 53,000 on Saturday and a week to date estimate of 650,000.
Feeder Cattle
The August Feeder Cattle contract consolidated within the Thursday trading range (151.675 – 149.825), with the Friday range at 151.50 – 150.05. Both sessions traded with the upper part of the Wednesday trading range (151.90 – 147.825). It was also constrained by the 151.55 resistance level and the 147.35 support level. A breakout above resistance could see price challenge the 152.30 resistance level and the 153.50. A breakdown from the 150.725 settlement could see support tested at 149.975, 148.40 and then 147.35
Lean Hogs
The August Lean Hogs contract opened at 70.375 and traded to the high of the day at 71.20. This was right at the 71.25 resistance level and hogs failed from here, trading down and making new lows for the day at the end of the session at 70.075. It settled at 70.15. This is right at the 70.125 support level and could be the key level for trade on Monday. A breakdown below 70.125 could see price test the 68.75 support level and the 68.525 low from Wednesday. Support then comes in at 67.775. A bounce from settlement could see price revisit the Friday high. Resistance then comes in at 71.80.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Thursday, July 19th 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.