Live Cattle
On Thursday July 26, 2018 the October Live Cattle contract broke out above the 11.25 Wednesday high, trading up to 112.25 for a new high for the up move. It couldn’t conquer resistance at 112.35 and the rally was defeated. Price retreated and then was routed. The selloff took price past the 110.80, 109.40 (Tuesday low) and108.65 support levels, on its way to the session low at 108.175. A late day rally to price higher and it settled at 109.375. The breakdown erased the 5 days of consolidation and the breakout rally candle from July 18th. It also formed a bearish engulfing candle. A breakdown below settlement on Friday could see price revisit the Thursday low. A breakdown below the low could see support tested at 107.35. A quiet Friday could see price consolidate within the Thursday range. Negotiated cash trade on Thursday was mostly inactive on very light demand in all major feeding regions. Thursday afternoon boxed beef cutout values were firm on moderate to fairly good demand and light offerings. Choice was up 0.27 at 204.91 with Select up 0.69 to close at 198.27 on 90 loads. The choice/select spread narrowed to 6.64. The hide and offal value from typical fed cattle for today was estimated at 9.03 per cwt live, down 0.11 from Wednesday’s value. The estimated cattle slaughter for Thursday was reported at 121,000, last week 121,000 and a year ago 118,000.
Feeder Cattle
The August Feeder Cattle contract tried to rally early in the trading session. It tested resistance at 154.25, making the high for the day at 154.225 and broke down from here. It traded past support at 149.975, making the low at 149.80. A late day surge took price back up to the 151.55 key level and it settled nearby at 151.425. Familiar levels to overcome for Friday are 152.30, 153.50 and 154.25. Trading below settlement could see price retest support at 150.90, 149.975 and then 148.40.
Lean Hogs
The October Lean Hogs contract rallied out of the gate and traded past resistance up at 55.475, making the session high at 55.975. It also failed and crashed. It traded down to 52.15 and settled nearby at 52.15. A breakdown below support at 51.80 could see price test the July 20 low at 50.725. A quiet Friday could see price consolidate within the Thursday range.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, July 27th 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.