Live Cattle
On Friday August 3, 2018 the October Live Cattle contract surged to the upper portion of its112.25 – 108.175 trading range. It reached a high of 112.15 and settled nearby at 112.00. The rally also stalled just shy of resistance at 112.35. This will be the key level for trading on Monday, in my opinion. A breakout above 112.35 could lead to a test of resistance at 113.90. Resistance then comes in at 114.65. A failure from settlement keeps trade within the trading range. Support will come in at 110.80, 109.825 and then 108.85. On Friday afternoon, trade was moderate on good demand in all feeding regions. Compared to last week, live purchases in the Southern Plains traded 2.00 higher at 114.00. In the Northern Plains, early live sales have traded at 114.00 with dressed sales in Nebraska from 178.00-180.00. A few early live sales in the Western Cornbelt have traded from 112.00-113.00. Boxed beef cutout values higher on Choice and steady on Select on moderate to fairly good demand and moderate offerings. Select and Choice rib, chuck, and round cuts steady. Choice loin cuts higher while Select weak. Beef trimmings sharply higher on good demand and moderate offerings. Choice rose 0.95 to 204.75 and select declined 0.01 to 197.09 on 117 loads. The choice/ select spread widened to 7.66.Slaughter for Friday is estimated to be 113,000.
Feeder Cattle
The September Feeder Cattle contract rallied above the152.30 resistance level, trading to the session high at 153.175. It settled nearby at 153.025. It stalled just below resistance at 153.50, which will be the key to Monday’s trade. A rally past 153.50 could lead to a test of resistance at 154.25. Resistance then comes in at 155.275. Trading below settlement could see price retest support at 152.30, 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 49.35, getting below the 49.925 support level. It surged to the session high at 52.15 and once again couldn’t handle success and gave most of the gains back, settling at 50.775. 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 Thursday, August 9th 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.