Live Cattle
The June Live Cattle contract made another new high on Wednesday, April 26, 2017, trading up limit before settling just below the limit move at 118.525. It traded and closed above the April 21st high (117.575) setting up a potential test of trendline resistance at 119.20. A break above the trendline could lead to a test of the January 19th high at 121.45. Support is at the April 21st high and then the 8 DMA (116.35). The fedcattleexchange online auction was held this morning with 5448 head for sale. There were 1,945 cattle sold with the bulk (1394) of them for 17 to 30 day delivery. The average price of for these cattle was 125.42. The rest of the cattle were for 1 to 9 (353 head) and 1 to 17 (158) day delivery. The average price for these cattle was 131.68 and 129.89 respectively. Box beef cutout prices saw Choice up 17 cents at 219.18 and Select down 55 cents at 205.72 on 135 loads. The estimated slaughter on Wednesday was 116,000.
Feeder Cattle
The August Feeder Cattle rallied and settled up limit at 145.85. This is just above the 145.15 resistance level. Staying above this level could lead to a test of resistance at 149.975, the August 2016 high. A breakdown from resistance could lead to a test of support at 144.175 and then 143.20.
Lean Hogs
The June Lean Hogs rallied early in the session, trading past the 21 DMA (71.925) to the high o f the day at 72.45. A late day breakdown took price past the 50 DMA (70.725) to the low of the day at 70.625. It settled just above the 50 DMA at 70 75. A breakdown from the 50 DMA could lead to a test of the 70.00 support level, and a continuation to the downside could retest support at 67.90. A bounce off the 50 DMA could see a retest of the 21 DMA and then the 72.875 resistance level.
For those interested I hold a weekly livestock webinar on Friday, April 28 at 3:00pm. 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.
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.