Live Cattle
On Wednesday August 1, 2018 the October Live Cattle contract continued its consolidation. Trading with a 109.05 low to a high of 110.875, cattle continues to coil. A chop fest. A quagmire…etc… It tested resistance at 110.80 at the end of the session and settled under it at 110.275. No help there! Thursday’s have been break down day recently, so is this a rally to sell? A failure from settlement could see price retest the Wednesday low and then 108.65. Support then comes in at 107.35. A rally above the high could see price test resistance at 112.35. Resistance then comes in at 113.90. So far for Wednesday trading has been at a standstill in all feeding regions. The fedcattleexhange.com online auction was active with 851 of 1,060 head offered sold. They traded at 110.00 and 110.25. Wednesday afternoon Boxed beef cutout values are weak on light demand and light to moderate offerings. Select and Choice rib and chuck cuts steady to firm while round cuts are steady to weak. Choice cutout closed 0.52 lower at 203.75 and Select cutout closed .80 lower at 197.58, with a Choice/Select Spread of 6.17. The hide and offal value from a typical slaughter steer for today was estimated at 9.01 per cwt live, unchanged when compared to Tuesday’s value.
Feeder Cattle
The September Feeder Cattle contract broke out of its Wednesday trading range (150.20 – 149.00) and rallied to the152.30 resistance level in the last 20 minutes of the day. It reached a high of 152.375 and settled just below resistance at 151.95. A rally above the high could see price test resistance at 153.50 and then 154.25. Trading below settlement could see price retest support at 151.55, 150.90, 149.975 and then 148.40.
Lean Hogs
The October Lean Hogs contract made a new low for the down move, trading down to 49.925, a key support level. It consolidated above the low then surged to the session high at 52.225. It couldn’t handle success and gave most of the gains back, settling at 50.525. A breakdown below settlement could see support tested again and another new low for the down move. Support then comes in at 48.725. A rebound from settlement could see the high retested. Resistance then comes in at 53,80.
For those interested I hold a weekly grain (with Sean Lusk) and livestock webinar on Friday, August 3rd 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.