Live Cattle
On Wednesday July 18, 2018 the August Live Cattle contract traded higher, breaking through the 108.65 resistance level on its way to the session high at 109.15. It settled above resistance at 108.95. The strong close could lead to a test of resistance at 109.825 and then 110.80. Support now comes in at 108.65 and 107.35. Negotiated cash trade on Wednesday was mostly inactive on light demand in all major feeding regions. Packer bids remain at 107 – 108 while producers are looking to sell cattle at 115. If futures can stay strong, packers may be forced to up their bids in order to buy some cattle. The cattle on feed report is on Friday after the close of futures. If futures consolidate on Thursday Packers may wait till the report comes out before making any purchases. Wednesday afternoon boxed beef cutout values were steady to firm on moderate demand and offerings. Choice was up 0.41 at 204.80 with Select up 0.23 to close at 197.09 on 132 loads. The choice/ select spread widened to 7.71. The hide and offal value from a typical slaughter steer for today was estimated at 9.20 per cwt live, up 0.02 when compared to Tuesday’s value. Estimated cattle slaughter for today is 119,000.
Feeder Cattle
The August Feeder Cattle contract broke free of its consolidation range taking out the 153.50 and 154.25 resistance levels on its way to ta new high for the up move at 154.90. It settled above resistance at 154.45. The next challenge for Feeder Cattle will be the 155.275 and 156.05 resistance levels. Support is now at 154.25, 153.50 and 152.30.
Lean Hogs
The October Lean Hogs contract is now the lead contract for Hogs as its volume has been larger than the August contract. It broke down right from the open and high of the day (52.45) to the low at 51.325. It settled at 51.925. IT tested support at 51.80 in a tight trading range and settled above it. A rally from settlement could see price test resistance at 53.80. If price breaks below the low a test of the 49.925 and 48.725 support levels is possible.
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.